Long-term changes in labor supply and taxes: evidence from OECD countries, 1956-2004

Lee Edward Ohanian (), Andrea Raffo () and Richard Rogerson ()

No RWP 06-16, Research Working Paper from Federal Reserve Bank of Kansas City

Abstract: We document large differences in trend changes in hours worked across OECD countries over the period 1956-2004. We then assess the extent to which these changes are consistent with the intratemporal first order condition from the neoclassical growth model. We find large and trending deviations from this condition, and that the model can account for virtually none of the changes in hours worked. We then extend the model to incorporate observed changes in taxes. Our findings suggest that taxes can account for much of the variation in hours worked both over time and across countries.

Keywords: Hours of labor; Labor supply; 401(k) plans (search for similar items in EconPapers)
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Date: 2006
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Related works:
Working Paper: Long-Term Changes in Labor Supply and Taxes: Evidence from OECD Countries, 1956-2004 (2006)
Journal Article: Long-term changes in labor supply and taxes: Evidence from OECD countries, 1956-2004 (2008)
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