Work and Leisure in the U.S. and Europe: Why So Different?

More on the U.S. and European labor market comparison:

Work and leisure in the U.S. and Europe: Why so different?, Alberto Alesina, Edward Glaeser, and Bruce Sacerdote NBER Macroeconomics Annual vol. 20, Revised: June 2005: 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. [Free earlier version on author web site.]

Comments

[Movie Guy]

"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."

I lived in Europe as a youth during the early sixties and I didn't note that Europeans were working longer hours per day, longer work weeks, or provided fewer holidays per year than Americans. This is not to criticize Europeans, but rather to question the general assertion.

As I recall, some (if not many) Americans worked 5.5 to 6 days a week until some time in the mid to late sixties. That was fairly common in the early sixties.

Granted, I am not basing my comments on detailed data analysis. But the Europeans must have been working on Sundays to have outworked the Americans.

[cm]

Another unscientific contribution is my contention (quite likely stated before on this blog) that it has something to do with how people define their "public" image and their self-worth.

By aggregate trend, since sometime after WW2, it has been increasingly money, money, money, "time is money", "working hard", "being busy", consumerism etc. in the US, at the expense of "fundamental" or subject-matter achievement. I get a sense that even people who don't truly believe in it choose to pay lip service e.g. in the corporate environment to avoid being ostracized. Success as well as role models are defined in terms of making loads of money in whichever way it takes to make a buck, and sporting extravagant lifestyles, preferrably displaying the material insignia of success. Europe is busy catching up, but lagging, both for cultural reasons and limiting regulations (and, again, economic constraints as Europe does not print the US dollar!). Perhaps Europe going through soul-searching, reconstruction, and society-building after the experience of Germany's slide into Fascism injected some bias as well.

So much for my amateur psychology.

[cm]

For example, in the corporate world by far the most praise of individuals I have heard was of the form "he/she works very hard". I have rarely heard, and that mostly from peers whose technical judgement and approach to business I value, "what he/she produces works".

From the other side, when somebody is rarely associated with or mentioned in connection with issues or fixing problems, one can hear "I don't know what this guy is doing", or "he probably doesn't do a lot".

I'm not making this up. This may illustrate a focus on "doing work", not "showing results", esp. when the people in question don't know how to tell good from bad (subject matter) results. And then there are the euphemisms (?) like "being involved in ...", which whiffs of "good with taking credit".

[Rajiv Thind]

My own interactions with Europeans and Americans tells me that the culture really is the main culprit for this divide. Americans are more shrewd, enterprising, risk takers and sacrificers for the sake of money. Also, Laissez-faire in America encourages as well as necessitates competition, money making and materialism. Europeans are burdened by culture, socialism, some reactionary attitudes that bar them from devoting their life to money making. But Europeans don't mind it either.

[cm]

Rajiv: Yeah, Europeans are not cut from a different cloth. It's the social environment that makes all the difference. Lots of downsides in Europe as well, excessive bureaucracy, individual & social anxieties of failure & inferiority, and their expressions in supremacy, Nazis, xenophobia, racism, etc.

[calmo]

I'm glad you are commenting on this cm because you are personally qualified (ok maybe movie too). This sounds reasonable to me:
" 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. "
Europe recognized its labor in a way that the US has not. Rather than cut jobs and stratisfy the population, it shared positions and the remuneration.
So civilized, it seems to me (ok the recent French riots do come to mind). And the impetus behind that desire to share having origins with the experience of Nazi Germany. Plausible --do we get confirmation from the Japanese experience? Both these places have more equitable distribution incomes, no? It seems to me that housing prices have made a big difference in the number of hours Americans are working. We'd like to work less, but there are bills and the medical ones are generally not looked after by the government like the European example.
Just a personally unqualified thought.

[cm]

calmo: They way societies work, based on how they evolved in interaction with external influences & observations, is always much more complex than meets the eye.

Other than what I said before on this thread and priors, from the 1500's onwards the US was mostly populated by some colonialists, (forcibly) soldiers "donated" by various rulers to fight on behalf of various power blocs, and lots of people from Europe (and later elsewhere) who did not want to live under the rigidities of the old continent (generally, stifled ambicionados, or persecution wise), or were fleeing from economic underperformance (famines). Perhaps that had a lasting influence on US mindsets. Not sure about Canada, maybe they strike me more regulated. The new US populace went on to kill/marginalize the indigenous people and conquered half of the continent, using a good number of "imported" laborers in the south.

But I digress. In the end those people defined a new society based (nominally) on individual freedoms, laissez-faire, and thus effectively became "the land of the free (enterprise)".

The later 1800's and the 1900's were characterized by the rise of corporations, and their influence-taking on governments. The depression of 1929, and the ensuing New Deal of FDR put a temporary check on this. All the while Europe had continued to pursue colonial games, experienced various socialist movements, and maneuvered itself through a series of crises culminating in WW2. The US jumped in at some point, and used its strong technology and social organization to deliver a decisive blow on Axis world dominance & colonial ambitions.

While Europe, and a good part of Asia, was licking its wounds, the US went on to establish itself as the leading economic power & "beacon of democracy/freedom" (mostly justified). Lots of qualified folks from everywhere flocked there in the pursuit of happiness. Tensions between the USSR and its Eastern Bloc vs. pretty much the Western world led to the cold war, and competition for the claim to the high road of world dominance, which the US won almost hands down (despite the serious blemish of Vietnam et. al.). OTOH the US flew to the moon, and landed other major accomplishments in Science & Tech, and pretty much remained the beacon of democracy that people continued flocking to until 2000 or so.

But during the 70's/80's (?) something happened that is not entirely clear to me. Perhaps it was a continuation of a dynamic persent earlier, and/or triggered by exogenous events. There was the oil shock, Carter, Reagan, Bush 1, ... just naming them without having a compelling story line. In Europe, and to the extent I talked to people here in the US, there has been a general sense of decadence and social decline (as evidenced by a decline in social cohesion, manners, courtesy & consideration). I recently called this the era the spirit of which is described best by the word "whatever".

I'm currently trying to read "Strauss&Howe: Generations", and they specifically make the (plausible) case that in the aggregate -- please again no offense anybody -- the generation growing up as kids/adolescents during Vietnam is a "screwed up" generation, and jumping beyond what I have read, that we may be in a part of a 88-year or so "saeculum" cycle leading up to a "social moment".

The signs kind of fit, but I'm not entirely sure.

Anyway, the bottom line is that the US was always based on individualism, laissez-faire, and "hard work" towards your vision, and a social environment encouraging risk-taking, which has been largely vindicated, and people across the world have voted for it with their feet (until 2000 and the accession of this administration at least).

Of course I'm grossly simplifying here, e.g. there have for 100+ years been active and largely effective efforts at union-busting, but due to the general success of the US way of doing things there has been no effective backlash against that.

Even though whatever happened that I cannot explain, focus on hard work & perseverance has been a central tenet of the US state of mind. Those things have a large inertia. And of course there is a large propaganda, both in terms of social environment and explicitly in the media, of success through "hard work".

Any ideas?

[calmo]

What a gush cm.
Now don't take offense at the bit coming next.
You are fired as my marketer.
Ok, that wasn't it, but I had to let fly with something: --I didn't feel up to the challenge of letting you know how I feel about the history of Europe and the formation of Germany and how it gave rise to honest to goodness feelings of community and how Americans got (honest to badness)feelings of survival of the fittest.
Ok, atleast to the point of sharing work (and now is the time to forget about the nightly raids on burning cars).
Do I have anything to say about your rendition of American history? I can tell you it beats my rendition of European history. And I refuse to demonstrate that point.
This seems truish: the victors write the history. And recently (from the 80s) that means the US media giants (the Boomers being the first generation to learn from TV). Ronald rides into the sunset is a production that asserts the power of the office of the President. A production that gives us the opportunity to reflect on the fact that as the richest and most powerful country on earth we are nearly in Heaven now. Other stories about his incompetence are not told. Worse, stories about real contributors, genuine artists, like Ray Charles are ignored.
I digress. I'm sure your 88yr cycle thing is a bunch of malarkey, but WWII did make an impression, a civilized one, on Europeans that we somehow exploited for the benefit of a few: those uncivilized ones.
Again, I feel underqualified to say, not having the European experience.

[cm]

calmo: You are stating what can plausibly pass as facts regarding the 80's & media, but don't explain anything.

Regarding the generational and human lifetime cycles, some concept of those has been known for several thousand years in various civilizations that engaged in chronicling and reflecting on history. It is obvious that you cannot fit an increasingly global social dynamic into a fixed periodic pattern, even less construct a rigid theory of social evolution, but there appear to be general principles in successions of generations and historical/social events around that. I wouldn't poo-poo it so easily.