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a b s t r a c tAmericans work more than Europeans. Using micro-data from the United States and 17 European countries, we document that women are typically the largest contributors to the cross-country differences in work hours. We also show that there is a negative relation between taxes and annual hours worked, driven by men, and a positive relation between divorce rates and annual hours worked, driven by women. In a calibrated life-cycle model with heterogeneous agents, marriage and divorce, we find that the divorce and tax mechanisms together can explain 45% of the variation in labor supply between the United States and the European countries.& 2015 Elsevier B.V. All rights reserved. IntroductionIt is a well-known empirical finding that aggregate hours worked are higher in the United States than in Europe and that there is also substantial variation among European countries; see for instance Prescott (2004) and Rogerson (2006). These differences deserve attention: Rogerson (2006) notes that they are an order of magnitude larger than the fluctuations at business cycle frequencies in post-WWII U.S. data. Are the differences in hours worked due to public policies or are they due to other fundamental differences between societies?This paper has two contributions: first, it documents, using cross-country data, that there is a negative relation between taxes and annual hours worked and a positive relation between divorce rate and annual hours worked. While the first relation is well-known, the second one is new, at least from a cross-country perspective. Furthermore, this paper shows that the negative relation between taxes and hours is driven by the behavior of men (i.e. for women the correlation between taxes and hours is close to zero) and the positive relation between divorce and hours is driven by the behavior of women (i.e. for men the correlation between divorce and hours is close to zero).Second, motivated by these two facts, this paper builds a life cycle model economy populated by heterogenous agents in which both taxes and marital instability affect hours of work. In the model economy, the marital transitions are exogenous, but given these exogenous transitions agents adjust their labor supply and savings behavior. An important assumption is that the labor force participation is associated with higher future earnings, as agents accumulate experience. The model is then calibrated to the U.S. and is used to evaluate how much cross-country differences in taxes and marriage and divorce rates can account for cross-country differences in hours worked. To this end, we use the calibrated economy and change taxes and/or marriage and divorce rates. The results show that taxes play an important role for differences in male hours, while differences in marriage and divorce explain differences in female hours.We begin by using micro-level data to document the contribution of various demographic groups to the aggregate differences in hours worked between the U.S. and 17 European countries (Western Europe, except Icelan...