The American Social Model (Tim Worstall):
«American capitalism really is a harsh taskmaster, isn't it? Those excessively long hours that everyone works, so different from the ease and leisure that applies in Europe along with our whiskey fountains, lakes of stew and the big rock candy mountain. That last being a product of a misdirected sugar beet subsidy of course. Indeed, there are those who insist that the US should regulate working hours, insist upon a reduction, as a way to bring some of this Euro-nirvana to the west coast of the Atlantic. There's only one small problem with this idea. It turns out not to be true.
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The latest empirical proof comes in a paper from the Federal Reserve Bank of Boston: We document that a dramatic increase in leisure time lies behind the relatively stable number of market hours worked (per working-age adult) between 1965 and 2003. Specifically, we document that leisure for men increased by 6-8 hours per week (driven by a decline in market work hours) and for women by 4-8 hours per week (driven by a decline in home production work hours). This increase in leisure corresponds to roughly an additional 5 to 10 weeks of vacation per year, assuming a 40-hour work week. We also find that leisure increased during the last 40 years for a number of sub-samples of the population, with less-educated adults experiencing the largest increases. Lastly, we document a growing "inequality" in leisure that is the mirror image of the growing inequality of wages and expenditures, making welfare calculation based solely on the latter series incomplete.
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Still, it could be true that while leisure hours are increasing in the US they are still lower than in Europe. Could be true but it isn't. This paper from Ronald Schettkat of Utrecht University explains it:
"The conventional view is that Americans work longer hours than Germans and other Europeans but when time in household production is included, overall working time is very similar on both sides of the Atlantic. Americans spend more time on market work but German invest more in household production."
The actual numbers show that American men work almost exactly the same hours, paid and unpaid together, as German men do; and German women actually 1.5 hours a week more than their sisters across the pond.
No, I think you'll agree, this isn't the basic story we get told about the European social model. We know that incomes are higher in the US but this is usually explained away as not really being higher income, as it's leisure that counts. And as we can see, what actually happens is that Americans get both the higher income and as much or more leisure as the Germans. Oh, and the Germans have problems with social exclusion as well as they're not generating the service jobs that employ the low-skilled.»
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