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America’s Exceptional Work Ethic

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American workers have always been industrious, leading to long-term growth and prosperity. The American spirit is one of self-reliance and individual drive to improve our financial situation, and it hasn’t wavered much even after centuries of increasing our standard of living. Long-term investments in education and a willingness to move for economic opportunities helped America succeed.

Click below to watch the other videos in Examining America's Exceptional Economy.

This four-part video series explores what has made America's economy successful, what sets it apart from other nations, and what needs to be done to sustain its prominence in the global economy. Lazear shows that America and its people have prospered by prioritizing economic freedom, industriousness, low taxes, light regulation, free trade, and openness to immigration. 

Edward Lazear studies labor markets, tax reform, human capital, and their effects on economic growth. He is the Morris Arnold and Nona Jean Cox Senior Fellow at the Hoover Institution and the Davies Family Professor of Economics at Stanford University's Graduate School of Business. He also served at the White House from 2006 to 2009 as a chairman of the President's Council of Economic Advisers.

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That said, I believe the best indicator of whether we are exceptional is in the market test. Are people buying our products?  Do people want to come here?

Look at the length of the queue of people waiting for green cards relative to the number of green cards issued over the past five years or so. What we see is that four times as many people are in the queue for a green card as are actually issued one in any given year. We’re the team everybody wants to play for. We’re the people you want to hang out with.

The evidence for that is the fact that this is the toughest country to get into, or certainly one of them. A survey asked Europeans in which country they would prefer to work. The plurality answer is the United States, with the UK second, followed by a variety of other countries.

What we don’t tend to see on that list are countries like Russia and China. Even Brazil is on there—it beat Russia and China, which are at the bottom, at 2 percent. We are, without question, the place to which people want to come. People put their money where their mouths are when it comes to locational choices and this tells us that we are exceptional.

Why is this the place where everybody wants to end up? What are the ingredients that have made our economy so successful over time? There are a number of factors. The first is that we are industrious. The second is that we’re a mobile society. Third, and others may dispute this, we have light regulation, low taxes, and are essentially a welcoming nation.

Tocqueville wrote: “The state of things is without parallel in the history of the world. In America, everyone finds facilities unknown elsewhere for making or increasing this fortune, the spirit of gain is always eager, swayed by no other impulse but the pursuit of wealth.” Notice that that’s not said in a pejorative way.

Tocqueville was really affirming a position that was articulated decades earlier, in 1776, by Adam Smith in The Wealth of Nations, where he argued that people acting in their own interest will, like an invisible hand, help the economy grow and move things forward. Tocqueville viewed Americans as willing to work and believed the Invisible Hand moved no more effectively elsewhere.

That’s still true. We work harder than people anywhere else. Here is a chart that shows the average number of hours worked per person in the working-age population. It’s basically saying let’s take the total number of hours that people are working, divide this by the population, and ask how many hours you get. It’s high not only because those who work put in long hours. It’s also because a high fraction of American adults are employed. 

Japan used to lead in this regard but in the last couple of decades the United States has passed Japan. We have both high labor force participation and hours of work. Some may believe we are working ourselves to death.  But I would say our work hours are a positive sign when coupled with our relative wealth: This essentially says that wealth has not made us lazy.

We still seem to have the drive that was required to make the economy and the country grow throughout our first 200 years. That spirit seems to be present, and it’s an encouraging message.

We also work hard in school. We invest very heavily in education and human capital. Not only is it true that we lead the big countries in terms of average levels of schooling right now, but we did so early on. We had compulsory schooling up to age 16 before almost all the other countries in the world did. We recognize the value of education, and of investing in human capital, and we were willing to put resources behind that. But we also know that we can improve education especially at the K-12 level.