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Long-Term Changes in Labor Supply and Taxes:
Evidence from OECD Countries, 1956-2004 By Lee Ohanian, Andrea
Raffo, and Richard Rogerson |
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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: Labor supply, wedges, taxes Back to top RWP home |