This is the subject of my latest column for Bloomberg, here is an excerpt:
Economists from Princeton, Vanderbilt and the Federal Reserve Bank of St. Although the answer depends on the context, they arrived at an average for US workers: About 20% of the difference in lifetime earnings can be explained by differences in hours worked…
The decision to work hard works on at least two levels. First, you put in more total time, which leads to more lifetime income. Second, you invest more in your employees, making you more productive. Between one-third and one-half of the top income of hard workers comes from this philanthropic channel. Another lesson is that if you are going to work hard, you should do it early in life, so that you can reap the benefits of humanity for years to come.
Another important point is that those who work hard do it because they want to. There can be different types of variation in abilities, including learning abilities or a person’s initial abilities. But in the researchers’ model, 90% of the variance in earnings due to hard work comes from the simple desire to work hard.
And this:
The research focuses on the US, but has implications for Europe as well. In France, for example, work is limited to 48 hours per week, with a standard week of 35 hours. That reduces the average wage and inequality in income, as it is harder for the top earners to keep making more money. This study finds that the losers of this regulation are found in all parts of the wage distribution, not just at the top.
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