Tuesday, November 12, 2013

Some people may be Rooshans, and some may be Prooshans

In September, I wrote about differences in working hours between the US and Europe.  According to the OECD, Americans aged 15-64 are employed for an average of 25.9 hours per week, while French are employed for an average of only 17.5 hours.  Some of this is because of differences in the typical "full-time" work week, and some of it is because of differences in unemployment, but some of it is because more people retire early in Europe.  Why do people retire early?  One possibility is because they want to, but another is that people who lose their jobs and may be unable to find new ones.  If they're old enough to qualify for some kind of retirement benefits, they may retire even though they would prefer to be working.  According to some people, that's the situation in much of Europe because of "structural rigidities" that make employers reluctant to hire people.

It occurred to me that one way to investigate this would be to look at the "life satisfaction" of people by work status.  Unemployed people can be expected to be considerably less satisfied than employed people.  People whose retirement was "involuntary" would be more like unemployed people in terms of their satisfaction.  So in countries in which a lot of retirement was involuntary, retired people would be less satisfied relative to employed people.  The Eurobarometer surveys, which have been conducted in EU countries since the 1970s, contain a question on satisfaction with your life.  The United States isn't included in the Eurobarometer, but the same question is asked in the Behavioral Risk Factors Surveillance System.  I used them (specifically the Mannheim Eurobarometer Trend File and the 2009 BRFSS) to get be following figures, which represent the difference in average life satisfaction between retired and employed people.  Positive numbers mean that retired people are more satisfied than employed people; negative numbers mean less satisfied:

France        0.14
Ireland        0.06
Luxembourg     0.04
NIreland       0.04
Britain        0.01
WGermany       0.00
USA            0.00
Spain         -0.02
Netherlands   -0.03
EGermany      -0.03
Sweden        -0.04
Finland       -0.06
Italy         -0.07
Austria       -0.07
Belgium       -0.08
Denmark       -0.08
Greece        -0.09
Norway        -0.20
Portugal      -0.20

In the US, Britain, and Germany there is little or no difference between retired and employed people.  In southern Europe and Scandinavia, retired people are on the average less satisfied.  But in France, retired people are considerably more satisfied than employed people.  This supports my conclusion in the earlier post:  that the French work less than Americans because that's the way they want it.  

This may help to explain something Paul Krugman wrote about the other day:  why many people are so negative about French economic policy, even though by objective standards the French economy is not doing badly.  Krugman says it's because France recently raised taxes rather than cut spending.  But I think it goes deeper than that:  see this New York Times editorial from 1997.  A lot of American commentators just seem to be bothered by a country that prefers short work hours and early retirement, even more than by high taxes.  

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