Why Doesn't the United States Have a European-Style Welfare State?

macroeconomics, United States, European-Style Welfare State

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

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.

Why Doesn't The US Have a European-Style Welfare State?

European countries are much more generous to the poor relative to the US level of generosity. Economic models suggest that redistribution is a function of the variance and skewness of the pre-tax income distribution, the volatility of income (perhaps because of trade shocks), the social costs of taxation and the expected income mobility of the median voter. None of these factors appear to explain the differences between the US and Europe. Instead, the differences appear to be the result of racial heterogeneity in the US and American political institutions. Racial animosity in the US makes redistribution to the poor, who are disproportionately black, unappealing to many voters. American political institutions limited the growth of a socialist party, and more generally limited the political power of the poor.

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

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.

Why Doesn't the United States Have a European-Style Welfare State?

European countries are much more generous to the poor relative to the US level of generosity. Economic models suggest that redistribution is a function of the variance and skewness of the pre-tax income distribution, the volatility of income (perhaps because of trade shocks), the social costs of taxation and the expected income mobility of the median voter. None of these factors appear to explain the differences between the US and Europe. Instead, the differences appear to be the result of racial heterogeneity in the US and American political institutions. Racial animosity in the US makes redistribution to the poor, who are disproportionately black, unappealing to many voters. American political institutions limited the growth of a socialist party, and more generally limited the political power of the poor.Economic

Mind the gap! Social capital, East and West

© 2008 Association for Comparative Economic Studies. Published by Elsevier Inc. This is the post-print version of the final paper published in Journal of Comparative Economics. The published article is available from the link below. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication.Social capital in Central and Eastern Europe lags behind that in Western European countries. We analyze the determinants of individual stock of social capital – measured by civic participation and access to social networks – and find that this gap persists when we account for individual characteristics and endowments of respondents. However, the gap disappears completely after we include aggregate measures of economic development and quality of institutions. Informal institutions such as the prevalence of corruption in post-communist countries appear particularly important. With the enlargement of the European Union, the gap in social capital should gradually disappear as the new member states catch up (economically and institutionally) with the old ones

National institutions and subnational development in Africa

Few issues have received more inquiry in the social sciences than “”what are the fundamental determinants of comparative development?”” The institutional view asserts that the ultimate causes of underdevelopment are poorly performing institutional structures, such as lack of constraints on the executive, poor property-rights protection, as well as inefficient legal and court systems (see Acemoglu, Johnson and Robinson 2005 for a review and Acemoglu and Robinson 2012 for an influential popular argument). Other works downplay the role of formal institutions, emphasising instead the importance of geographical features, informal cultural norms, genetic, and epidemiological traits (see Spolaore and Wacziarg 2013 for a review, and Diamond 1997 and Landes 1998 on popular arguments on the importance of geography and culture, respectively)

Separate worlds? Explaining the current wave of regional economic polarization

Inter-regional and inter-metropolitan economic divergence is greater in many western developed countries than it has been in many decades. Divergence manifests itself in many ways, including per capita income, labor force participation, and the spatial the distribution of skills and returns to education. At the same time, geographical polarization of political preferences and electoral choices has increased, with gains in populism and nationalism in some regions, and broadening of socially liberal, pro-trade, and multicultural attitudes in other regions. The task of explaining these developments poses challenges to economic geography and regional and urban economics. These fields have already developed some of the building blocks of an account, but a number of important gaps persist. This article is devoted to identifying priorities for regional science and urban economics, the new economic geography, and proper economic geography to tackle the key mechanisms behind divergence as well as to integrate them in a common overall framework