Market Work, Home Work and Taxes: A Cross Country Analysis

Richard Rogerson

No 14400, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper uses a simple model of labor supply extended to allow for home production to understand the extent to which differences in taxes can account for differences in time allocations between the US and Europe. Once home production is included, the elasticity of substitution between consumption and leisure is almost irrelevant in determining the response of market hours to higher taxes. But to account for observed differences in leisure and time spent in home production, one requires a large elasticity of substitution between consumption and leisure, and a small elasticity of substituion betwen time and goods in home production.

JEL-codes: E60 H20 J22 (search for similar items in EconPapers)
Date: 2008-10
New Economics Papers: this item is included in nep-cba, nep-dge, nep-lab and nep-mac
Note: EFG
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Citations: View citations in EconPapers (1)

Published as Richard Rogerson, 2009. "Market Work, Home Work, and Taxes: A Cross-Country Analysis," Review of International Economics, Blackwell Publishing, vol. 17(3), pages 588-601, 08.

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Journal Article: Market Work, Home Work, and Taxes: A Cross‐Country Analysis (2009)
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