Extensive and Intensive Margins of Labour Supply - Working Hours in the US, UK and France - IFS Working Paper 01/11

Aug 27, 2026

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This paper documents key stylised facts behind how labour supply evolved over the last forty years at both extensive and intensive margins across the United States, United Kingdom, and France. A statistical decomposition is developed to bound changes at each margin and to ensure coherence with elasticities of labour supply. Using detailed representative micro-datasets, it assesses how much extensive versus intensive margin shifts explain changes in total hours worked. It also reports initial estimates of the distribution of implied elasticities and their implications for aggregate hours elasticity.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages81

Reading Time3 h 24 min

AccessFree to download

Introduction

Working Hours in the US, the UK and France

Definitions and Data

Trends in Employment and Hours since 1968

The Importance of Age and Gender

Elasticities at the Intensive and Extensive Margins

Fixed Costs of Work

Aggregating Elasticities and the Elasticity of Aggregate Hours

Nonseparable Preferences and Alternative Life Cycle Consistent Elasticities

Decomposing Changes in Total Hours

Bounds on Changes at the Extensive and Intensive Margins

The Decomposition of Total Hours for the US, UK and France

Children, Youth and Older Workers

Women with Children

Youth Employment, Unemployment and Education

Older Workers, Pensions and Increasing Life Expectancy

Estimating the Distribution of Elasticities

Empirical Specification

Elasticity Results

Conclusions

Appendices

Measurement Issues

Weekly Hours vs Annual Hours

Additional Figures

Extensive and intensive margins of labour supply: working hours in the US, UK and France IFS Working Paper 01/11 Richard Blundell Antoine Bozio Guy Laroque Extensive and Intensive Margins of Labour Supply: Working Hours in the US, UK and France Richard Blundell, Antoine Bozio and Guy Laroque 􀀃 March 2011 Abstract This paper documents the key stylised facts underlying the evolution of labour supply at the extensive and intensive margins in the last forty years in three countries: United-States, United-Kingdom and France. We develop a statistical decomposition that provides bounds on changes at the extensive and intensive margins. This decomposition is also shown to be coherent with the analysis of labour supply elasticities at these margins. We use detailed representative micro-datasets to examine the relative importance of the extensive and intensive margins in explaining the overall changes in total hours worked. We also present some initial estimates of the broad distribution of implied elasticities and their implication for the overall aggregate hours elasticity. 􀀃 Blundell: University College London (UCL) and Institute for Fiscal Studies (IFS), 7 Ridgmount Street WC1E 7AE London United Kingdom, [r.blundell@ucl.ac.uk. Bozio:](r.blundell@ucl.ac.uk. Bozio:) UCL and IFS, [a.bozio@ifs.org.uk](a.bozio@ifs.org.uk). Laroque: UCL, IFS and INSEE-CREST, [g.laroque@ucl.ac.uk. We thank](g.laroque@ucl.ac.uk. We thank) Steve Davis and participants atthe AEA session for comments, and the Data archive UK, INSEE and IUPMS for data access. Contents 1 Introduction 3 2 Working Hours in the US, the UK and France 5 2.1 De􀀌nitions and Data .............................. 5 2.2 Trends in Employment and Hours since 1968 ................. 8 2.3 The Importance of Age and Gender ...................... 8 3 Elasticities at the Intensive and Extensive Margins 15 3.1 Fixed Costs of Work .............................. 15 3.2 Aggregating Elasticities and the Elasticity of Aggregate Hours ....... 17 3.3 Nonseparable Preferences and Alternative Life Cycle Consistent Elasticities 18 4 Decomposing Changes in Total Hours 18 4.1 Bounds on Changes at the Extensive and Intensive Margins ........ 19 4.2 The Decomposition of Total Hours for the US, UK and France ....... 21 5 Children, Youth and Older Workers 26 5.1 Women with Children ............................. 26 5.2 Youth Employment, Unemployment and Education ............. 30 5.3 Older Workers, Pensions and Increasing Life Expectancy .......... 33 6 Estimating the Distribution of Elasticities 36 6.1 Empirical Speci􀀌cation ............................. 36 6.2 Elasticity Results ................................ 38 7 Conclusions 40 Appendices 44 A. Measurement Issues ................................ 44 B. Weekly Hours vs Annual Hours ......................... 62 C. Additional Figures ................................. 65 1 Introduction Forty years ago the Europeans (here French and British) used to work more than the Americans. They now work less. The aim of this paper is to provide a coherent picture of these changes. To do so we split the overall level of work activity into the number of individuals in work and the intensity of work supplied by those in work. This re􀀍ects the distinction between whether to work and how much to work at the individual level and is referred to, respectively, as the extensive and intensive margin of labour supply. Atthe aggregate level the former is typically measured by the number of individuals in paid employment and the later by the average number of working hours. The di􀀋erence between the extensive and intensive margins has been highlighted in recent research attempting to resolve di􀀋erences between micro and macro responses of labour supply to tax reform. For example, Rogerson & Wallenius (2009), following the work of Prescott (2004), argue that the responsiveness of the extensive margin of labour supply

FAQs

What do “extensive” and “intensive” margins mean in this study?

The paper separates whether people work (extensive margin) from how many hours they work (intensive margin). Aggregate measures typically use employment counts for the extensive margin and average working hours for the intensive margin.

How does the paper analyze changes in labour supply across countries?

It develops a statistical decomposition that bounds changes at the extensive and intensive margins. The approach is also checked for coherence with labour supply elasticities at these margins.

What data and methods are used to compare the importance of the two margins?

The analysis relies on detailed representative micro-datasets for the US, UK, and France. It uses these data to evaluate the relative contribution of extensive versus intensive margin changes to movements in total hours worked.

Aug 27, 2026

Upload by Asher