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Longer Vacations are not About Taxes but about Unions and Government Policies: Paul Krugman at the New York Times writes about European Leisure

By Andis Kaulins

Paul Krugman at the New York Times writes about European Leisure. The fact is that average "vacation time" in Europe is much longer than in the United States, also in terms of paid vacations, and it does not seem to negatively impact productivity. In fact, the increased leisure time helps to develop leisure-related products and service industries, raising general quality standards in recreation and accomodations that are probably unique to Europe.

Krugman refers to the Harvard Institute of Economic Research Discussion Paper No. 2068 on Work and Leisure in the U.S. and Europe: Why so Different?* by Alberto F. Alesina, Edward L. Glaeser and Bruce Sacerdote which writes in its Abstract:

"Americans average 25.1 working hours per person in working age per week, but the Germans average 18.6 hours. The average American works 46.2 weeks per year, while the French average 40 weeks per year. Why do western Europeans work so much less than Americans? Recent work argues that these differences result from higher European tax rates, but the vast empirical labor supply literature suggests that tax rates can explain only a small amount of the differences in hours between the U.S. and Europe. Another popular view is that these differences are explained by long-standing European "culture", but Europeans worked more than Americans as late as the 1960s. In this paper, we argue that European labor market regulations, advocated by unions in declining European industries who argued "work less, work all" explain the bulk of the difference between the U.S. and Europe. These policies do not seem to have increased employment, but they may have had a more society-wide influence on leisure patterns because of a social multiplier where the returns to leisure increase as more people are taking longer vacations.

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*Alesina, Alberto F., Glaeser, Edward L. and Sacerdote, Bruce, Work and Leisure in the U.S. and Europe: Why so Different? (April 2005). Harvard Institute of Economic Research Discussion Paper No. 2068. Available at SSRN: http://ssrn.com/abstract=706982 or doi:10.2139/ssrn.706982

Full post as published by LawPundit on April 05, 2010 (boomark / email).