Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We estimate the responses of gross labor income with respect to marginal and average net-oftax rates in France over the period [2003][2004][2005][2006]. We exploit a series of reforms to the incometax and payroll-tax schedules affecting individuals who earn less than twice the minimum wage. Our estimate for the elasticity of gross labor income with respect to the marginal netof-income-tax rate is around 0.2, while we find no response to the marginal net-of-payroll-tax rate. The elasticity with respect to the average net-of-tax rate is not significant for the incometax schedule, while it is close to -1 for the payroll-tax schedule. A plausible explanation is the existence of significant labor supply responses to the income-tax schedule, combined with sticky posted wages (i.e., the gross labor income minus payroll taxes divided by hours worked). Finally, the effect of the net-of-income-tax rate seems to be driven by participation decisions, in particular those of married women.
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Documents inJEL-Code: H240, H310, J220, J380.
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We estimate the responses of gross labor income with respect to marginal and average net-oftax rates in France over the period [2003][2004][2005][2006]. We exploit reforms of the income and payroll tax schedules that affect individuals earning less than twice the income of a full-time minimum wage worker. Our estimate for the elasticity with respect to the marginal income net-of-tax rate is around 0.3 while we find no response to changes in the marginal payroll net-of-tax rate. Elasticities with respect to the average tax rates are not significant for the income tax schedule while it is close to -1 for the payroll tax schedule. A possible explanation is a rigidity of the hourly posted wage, together with labor supply responses, casting doubts about public finance analysis that assume perfect competition on the labor market.
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