Here's a puzzle: Two decades ago, the U.S. led the world in reducing work hours. Americans worked fewer hours than West Germans and other Europeans and seemed more devoted to leisure. Today, the situation is reversed: American workers now put in about 15% more hours than Germans, who enjoy more leisure than European neighbors.
Furthermore, note economists Linda Bell of Haverford College and Richard Freeman of Harvard University in a new study, this shift is reflected in worker attitudes. In the 1960s, many German workers would have liked to increase their work time. Today, however, they are more interested in working less, while Americans are interested in working even longer hours.
One reason for this may be that high German taxes and social benefits make work less rewarding. But Bell and Freeman note that taxes and benefits are high in other European nations, where people still work more than Germans. Their analysis indicates that workers work longer hours in countries with a relatively wide gap between earnings than they do in countries like Germany, with low earnings inequality.
Thus, the two economists believe that greater earnings inequality in the U.S., combined with less job security and a lower safety net, has heightened incentives for work. In America, says Freeman, "low-wage earners have to really scramble to survive, while high-wage earners can wind up with a pot of gold."