Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/191894 
Year of Publication: 
2019
Series/Report no.: 
Economics Discussion Papers No. 2019-1
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
The authors propose an explanation of why Europeans choose to work fewer hours than Americans and also suffer higher rates of unemployment. Labor market regulations, unemployment benefits, and high levels of public consumption in many European countries reduce, ceteris paribus, the gains from being employed, which makes employed workers ask for higher wages relative to productivity. The higher wages make firms offer fewer vacancies, as well as raising the level of consumption enjoyed by workers, which makes them want to enjoy more leisure because consumption and leisure are complements in the utility function.
Subjects: 
job search
unemployment
working hours
JEL: 
J63
J64
J65
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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