It is a well established fact that Europeans perform vastly less formal market work than Americans. A less known fact is that this is a recent development— in the late 50s, Europeans worked about 10% more hours, but this has been in steady decline for 40 years, until now they work about 30% fewer hours than Americans.
Another less known fact is that Europeans do a lot more home production (stay home to care for children or elderly, tend the house, cook the food, etc.). In fact, most (or possibly all) of that time that they don’t spend in the marketplace, they spend working at home. This gets reflected in the European economy, which has a distinctly smaller service sector than the U.S.
Last week, an economist came through BYU to give a presentation and pointed out that, according to his rather simple model, the entire difference between the two regions could be explained by higher tax rates in Europe encouraging people to do their own work instead of buying services (ie, legally evade some income tax). The model and empirical work was okay but very basic, more suggestive than definitive. Should we bump up the income tax and see if that will keep people at home with their kids? I’m disinclined, but its an interesting idea.
“Europe” in this case was proxied for by France, Germany, Italy, and Spain which make up the lion’s share of the European economy. I don’t know how different some of the smaller countries look, but if you are averaging across Europe my understanding is that these are the countries that will control the average.