Patterns of Work Across the OECD.

Market work per person of working age differs widely across the OECD countries and therehave been some significant changes in the last forty years. How to explain this pattern?Taxes are part of the story but much remains to be explained. If we include all the elementsof the social security systems like early retirement benefits, sickness and disability benefitsand unemployment benefits, then we can capture some aspects of the overall pattern but stilla lot remains unexplained. The story favoured by Alesina et al. (CEPR DP.5140, 2005) isthat the nexus of strong unions, generous welfare and social democracy implies both hightaxes and pressure in favour of work-sharing in response to adverse shocks. This story,however, falls foul of the simple fact that most Scandinavian countries now do much morework than the French and Germans despite having stronger unions, more generous welfare,higher taxes and more social democracy. Ultimately, we are forced into the position thatthere is no simple story. Some of the broad patterns can be explained but there remaincountry specific factors which are hard to identify but lead to substantial differences from onecountry to another