Here’s a chart from Lane Kenworthy:
His interpretation is that this is mostly not about taxes, but about family policy:
One group, in the lower-right corner, includes Germany, Italy, the Netherlands, France, and Belgium. These countries, along with Austria, have several features that might contribute to low work hours. One is strong unions. Organized labor has been the principal force pushing for a shorter work week, more holiday and vacation time, and earlier retirement. These nations also have been characterized by a preference for traditional family roles: breadwinner husband, homemaker wife. This preference, often associated with Catholicism and “Christian Democratic” political parties, is likely to influence women’s employment and work hours. It is manifested in lengthy paid maternity leaves, lack of government support for child care, income tax structures that discourage second earners within households, and practices such as German school days ending at lunch time and French schools being closed on Wednesday afternoons. These countries also fund their social insurance programs via heavy payroll taxes, the kind most likely to discourage employment growth.
A second group consists of the four Nordic nations: Denmark, Sweden, Finland, and Norway. These countries too have strong unions. But they also have had electorally successful social democratic parties, which have tended to promote high employment. Denmark and Sweden, in particular, have been at the forefront in use of active labor market programs to help get young or displaced persons into jobs, public employment to fill gaps in the private labor market, and government support for child care and preschool to facilitate women’s employment.
One way to characterize this, perhaps, is in terms of which kinds of political parties dominate on the right. In the hard working countries, the main right-of-center party defines itself as “liberal” whereas in the barely working countries the main right-of-center party doesn’t. The Netherlands may be an interesting test case here since traditionally the Christian Democrats have been the dominant right-of-center force but in the most recent election they lost that status to a liberal party. Will that mean an upsurge in policies designed to encourage people to work more?