TY  - JOUR
AU  - Bell,Linda A.
AU  - Freeman,Richard B.
TI  - The Incentive for Working Hard: Explaining Hours Worked Differences in the U.S. and Germany
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8051
PY  - 2000
Y2  - December 2000
UR  - http://www.nber.org/papers/w8051
L1  - http://www.nber.org/papers/w8051.pdf
N1  - Author contact info:
Linda Bell
E-Mail: lbell@haverford.edu

Richard B. Freeman
NBER
1050 Massachusetts Avenue
Cambridge, MA  02138
Tel: 617/868-3900
Fax: 617/868-2742
E-Mail: freeman@nber.org
AB  - This paper seeks to explain the greater hours worked by Americans compared to Germans in terms of forward-looking labor supply responses to differences in earnings inequality between the countries.   We argue that workers choose current hours of work to gain promotions and advance in the distribution of earnings. Since US earnings are more unequally distributed than German earnings, the same extra work pays off more in the US, generating more hours worked.  Supporting this inequality-hours hypothesis, we show that in both countries hours worked is positively related to earnings inequality in cross section occupational contrasts and that hours worked raises future wages and promotion prospects in longitudinal data.
ER  -