Laws Regulating Working Time Not Unrelated To Taxation

Recently, a number of leftists have argued that the fact that people work less in for example France compared to for example the U.S. isn’t because of higher tax rates, but because of regulations mandating shorter working hours and longer vacations.

There is no doubt that those regulations have a key role behind the lower labor input per capita in France. However, it should be noted that it is likely that the rules themselves aren’t unrelated to tax rates.

Because of the high marginal tax rates, the French public will value shorter working days and longer vacations more compared to higher income than they would have with low marginal tax rates.

This doesn’t just mean that individuals will freely choose to work less in some cases, it also means that public support for shorter working days and longer vacations-regulations will be stronger.

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