No, Rich People Don't Work More

05/12/2015 03:30 pm ET | Updated May 12, 2016

The meme is ubiquitous, and widely documented: Rich people work longer hours. Obvious implication: they deserve what they get, right? Ditto the poor.


Why? All the research supporting that meme looks at workers, not families. Sure, workers who work more hours generally earn more. No surprise there. But the workers-only meme completely ignores the time people spend as students, retired, doing home care, etc. If you count that, rich people -- people in rich families -- work less.

Alert the media: workers work more than non-workers. And, newsflash: rich families are full of non-workers. If you look at families and their hours worked per person, you see a very different picture:

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Here's the same 3+ household data for working-age families only: those with a head of household under age 65.

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Pretty much the same story.

This is all based on a fast-and-dirty random census pull of about 5,000 U.S. households, from IPUMS. It uses 3+ households as a proxy for families -- probably not a bad proxy. A professional economist doing proper due diligence would fine tune that, or even better, turn to the Panel Study of Income Dynamics (PSID), which has better microdata to track families. Careful work would even allow them to track extended, multi-generation families, not just nuclear families living together. (Think: dynasties.) I'd expect the pattern we see here to be more pronounced in that view (though that's just a surmise).

Here's some more evidence, from across the pond:

Figure 1: Average hours of work across the distribution of earnings: UK, 2013.


Figure 2: Changes in post-tax real hourly earnings and average hours for the median and top 1 percent.


Even as rich people's incentives to work have skyrocketed, their hours worked have plummeted. This even though they're far more likely to be doing interesting, engaging work in pleasant environments. Curious.

But still: low-income people work less. More of them are unemployed. Is that a surprise to anyone? (I'll leave the "voluntary" argument to my gentle readers.)

There's a stylized fact out there, universally repeated by economists and pundits, that seems to misrepresent the state of the world. There are some nice tractable research projects here for those who are paid to do such things.

Crossposted at Asymptosis.