For example in japan 759 percent of the workforce

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Unformatted text preview: hours a week varies from country to country. For example, in Japan, 75.9 percent of the workforce works more than 40 hours a week and in the United States it is 67.6 percent. In contrast, in France 21.4 percent of the workforce works more than 40 hours a week and in Norway it is 15.8 percent. Do workers in some countries simply have a stronger preference for leisure (over work) than in other 34 Page 34 countries? For example, do the French and the Norwegians place a higher value on leisure time than the Americans and the Japanese? It is possible, but it could also be something else. Taxes, for example, are higher in some countries than in other countries. The difference between “what one earns” and “what one gets to keep” (after taxes) is the money reward for working. We would expect where the money reward from working is lower, people would want to work less, and where the money reward from working is higher, people would want to work more. If we look at total tax receipts as a percentage of income earned, we find that percentage to be lower in Australia, Japan, and the United States—all countries where workers work relatively more hours. For example, in Australia this percentage was recently 31.5 percent, in Japan it was 27.1 percent, and in the United States it was 29.6 percent. In contrast, in Sweden, France, and Norway, total tax receipts as a percentage of income earned was much higher. It was 54.2 percent in Sweden, 45.3 percent in France, and 40.3 percent in Norway. Another explanation of why people work more or fewer hours has to do with how well one can do if he or she does not work. In some countries, the social assistance given to the unemployed is higher than in other countries. All other things being equal, we would expect that “not working” causes fewer Chapter 2 Economic Systems and the Global Economy This sign in Madrid, Spain, says the store will be closed until September. What reasons might explain why workers would choose to take long vacations? problems in a country that provides relatively greater social benefits. Taxes and social spending may not explain all the difference between hours worked, however. It is still possible that people in various countries are willing to make different trade-offs when it comes to labor and leisure. After all, some people, within a country, for whatever reason, seem to value leisure more than others. The same effect might occur, on average, between people in different countries. THINK ABOUT IT Suppose that 60 percent of the difference between hours worked is explained by taxes and social spending, and 40 percent is explained by different trade-offs people in different countries make. What might make one person value leisure more than another person? 02 (030-053) EMC Chap 02 11/17/05 4:13 PM Page 35 Government’s Role in the Economy Economic Plans In a free enterprise economic system, government plays a small role in the economy. It does not make decisions on things like what goods and...
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This document was uploaded on 01/16/2014.

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