Consumption and Hours between the United States and France

Lei Fang and Fang Yang

No 2021-7, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta

Abstract: We document large differences between the United States and France in allocations of consumption expenditures and time by age. Using a life-cycle model, we quantify to what extent tax and transfer programs and market and home productivity can account for the differences. We find that while labor efficiency by age and home-production productivity are crucial in accounting for the differences in the allocation of time, the consumption tax and social security are more important regarding allocation of expenditures. Adopting the U.S. consumption tax decreases welfare in France, and adopting the U.S. social security system increases welfare in France.

Keywords: consumption expenditures; home production; labor supply; fiscal policy (search for similar items in EconPapers)
JEL-codes: E21 E62 H31 J22 O57 (search for similar items in EconPapers)
Pages: 52
Date: 2021-01-29
New Economics Papers: this item is included in nep-dge, nep-lma and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedawp:90077

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DOI: 10.29338/wp2021-07

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