Working Hours in Canada and the United States

This paper investigates annual working hours in the United States and Canada over the period 1979 to 2000. The study finds that a working hours gap opened in the 1980s and expanded substantially in the 1990s. It investigates the possibility that labour supply differences, specifically (1) incentives resulting from wage inequality, or (2) differences in the employment engagement of women, youth or older men, explain this working hours gap. The study finds that the stylized facts do not lead one to a supply side explanation. In fact, the sluggish economic growth in Canada relative to the U.S. (reflected in the unemployment rate) during much of the 1990s provides the best explanation for the increase in the hours gap, suggesting that explanations for the divergence in hours worked between the U.S. and Canada should focus on the demand side of the labour market.