From McDonald’s to McKinsey; The US-German Gap in Female Employment

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 29.07.2003, 12:15 - 13:30

   

Presentation by 

Ronald Schettkat (University of Wuppertal)
   

Abstract:

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. This paper examines whether these differences in the allocation of time can be explained by differences in the incentive structure, this is by the tax-wedge and differences in the wage differentials, as economic theory suggests. Its analysis of unique time-use data reveals that the differences in time-allocation patterns can indeed be explained by economic variables. Women work much more in the US than in Germany and most other EU economies. We find that the USGerman employment gap is not strongly related to cross-country differences in the level of pay or social benefits. The difference in employment is due to the different marketization of activities between the two economies: German women work as many hours as US women when we consider time spent in household production as well as in market production. For instance, German women spend more time preparing meals while US women use take-out and restaurants more intensely. The organization of some social activities, such as schooling, and the dispersion of skills, as well as pay differences, affect the degree of marketization.

   
   
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