Women work much more in the US than in Germany and most other EU economies. We find that theUS¿German employment gap is not strongly related to cross-country differences in the level of pay orsocial benefits. The difference in employment is due to the different marketization of activities...

Germany's more compressed wage structure is widely viewed as the main cause of the German-US difference in employment and unemployment, but part of the compression is due to Germany having a narrower distribution of skills than the US. Even adjusted for skills, however, we find that Germany has...