28 January 2011

French v. U.S. GDP Per Capita

French GDP per capita is lower than U.S. GDP per capita almost entirely because the French has chosen to have more leisure and make less money as a result.

[H]ere are some ratios of France to the United States:

GDP per capita: 0.731
GDP per hour worked: 0.988
Employment as a share of population: 0.837
Hours per worker: 0.884

So French workers are roughly as productive as US workers. But fewer Frenchmen and women are working, and when they work, they work fewer hours.

Why are fewer Frenchmen working? . . . [D]uring prime working years they’re as likely to work as Americans. But fewer young people work (in part because of more generous college aid); and, mainly, the French retire earlier. . . it’s not a problem of weak productivity or mass unemployment.

And why do the French work shorter hours? Probably for the most part because of government policies mandating vacation time.

The bottom line is that France is a society with the same level of technology and productivity as the US, but one that has made different choices about retirement and leisure.

Per Krugman.

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