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Are Europeans Lazy ? Or Americans Crazy? Final Remarks Guido Tabellini.

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Presentation on theme: "Are Europeans Lazy ? Or Americans Crazy? Final Remarks Guido Tabellini."— Presentation transcript:

1 Are Europeans Lazy ? Or Americans Crazy? Final Remarks Guido Tabellini

2 2 Tastes or Opportunities? Different time use across & within countries Different tastes? => no strong policy implications externalities internalized by unions Different opportunities? => remove distortions taxes, wrong institutions

3 3 Tastes or opportunities? Hard to discriminate No simple correlation between outcomes and institutions / taxes Employment rates: –cross country differences mainly in specific groups women, elderly, young employment rates of prime age males same everywhere –culture correlated with group employment rates Algan and Cahuc (2005)

4 4 Are people happier if they work less? WWS collects data on “life satisfaction” 4 waves (1980-2000), about 60 countries Can we measure happiness? genes / culture / quality of govt…… Focus on gender differences in happiness within countries Are they explained by labor market outcomes / time use?

5 5

6 6 Unemployment, not time use explains happiness

7 7 Implications Focus on extensive margin more than intensive one Focus on Unemployment more than time use Worry if U concentrated in specific groups Don’t intervene to alter time allocations –perhaps Dutch or Italian mothers are happier at home? –do we really need a subsidy for mkt child care?

8 8 A “Panglossian” view? not for continental EU Low average mkt time also reflects insiders’ rents generous early retirement / high youth unemployment inflexible working / contractual arrangements Systematic over-representation of “insiders” in collective bargaining & in politics (Alesina et al.) Bargaining system: –born to protect labor against capital –now exploited by insiders at expenses of outsiders

9 9 Do we need govt. regulation of working time? Original protection of workers against exploitation by capital Likely to be misused to benefit insiders and hurt outsiders (France) Working time arrangements should be left to private negotiations between firms and unions But private negotiations distorted if unions represent narrow insiders’ interests

10 10 Key challenge for continental EU How to reduce influence of insiders Broaden interests represented by unions? –Eg. surge of part time work in the Netherlands –Northern Europe Allow firms and workers to opt out of collective agreements? –Germany

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