Time, money and inequality in international perspective

Across OECD countries there are large differences in the average level and trend of working hours and there is persuasive evidence that attitudes to paid employment, particularly for women, differ significantly. This paper therefore asks the question: 'How much of the difference between countries in inequality of the distribution of money income can be explained by differing probabilities of paid employment?' Luxembourg Income Study data on the USA, UK, Canada, Germany, France and Sweden is used to simulate the income distributions that other countries would have if they had the US (or German) female, and total, employment rate. In every case, measured trans-Atlantic differences in the inequality of money income increase - hence observed differences understate the extent of differences in well being. Put simply, in the US the less affluent have to work harder, and still end up relatively poorer, than in other countries.