Market work per person is roughly 10 percent higher in the U.S. than in Sweden. However, if we include the work carried out in home production, the totalamountofworkonlydiffers by 1 percent. I set up a model and show that differences in policy — mainly taxes — can account for the discrepancy in both labor supply and home production between Sweden and the U.S. These results are independent of the elasticity of labor supply
To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.