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Productivity, Taxes, and Hours Worked in Spain

July 13, 2017
Productivity, Taxes,
and Hours Worked
in Spain
 
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In a recent Staff Report published by the Federal Reserve Bank of Minneapolis, Tim Kehoe and Juan Conesa examine the effects of taxes and productivity on hours worked per working-age person in Spain from 1970-2015.

Kehoe and Conesa found that the decline in hours worked per working-age person in 1975 and the subsequent increase in 1994 were not caused solely by the evolution of taxes. While taxes played a large role, some of the change in hours can be attributed to the institutional arrangements of the Spanish labor market. Additionally, the authors observed that productivity had a small impact on hours worked over 1970-2015.

Timothy J. Kehoe is the Distinguished McKnight University Professor in the Department of Economics at the University of Minnesota.

Juan Carlos Conesa is a professor of economics at Stony Brook University and graduated from the University of Minnesota's Ph.D. program.