Estimating Labor Supply Responses Using Tax Reforms

Blundell, Richard; Bozio, Antoine; Laroque, Guy

doi:10.1093/acprof:oso/9780198749806.003.0007

Cited by 110 publications

(202 citation statements)

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“…The included taxes are income tax and employee National Insurance (but not the community charge or council tax). 5 In Section 5, we use net income measures that are calculated using TAXBEN -the Institute for Fiscal Studies' tax and benefit microsimulation model for the UK, used previously by Mirrlees et al (2011) and Blundell et al (1998) -to assess the distributional impact of various hypothetical policy reforms. We take information from the BHPS on family characteristics and usual gross earnings (from primary jobs only) to calculate tax liabilities and benefit entitlements under different base and reform systems.…”

Section: Datamentioning

confidence: 99%

What a difference a day makes: inequality and the tax and benefit system from a long-run perspective

Roantree

Shaw

2017

J Econ Inequal

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Most analyses of inequality and tax and benefit reforms are based on measures of individuals' circumstances at a point in time. But strong age-profiles in earnings, among other characteristics that the tax and benefit system conditions upon, combined with individuals' ability to transfer resources across time suggests that measuring circumstances over longer horizons may lead to a very different picture. In this article, we consider how our impression of inequality and the tax and benefit system changes when the horizon under consideration is extended. We show that inequality is lower, redistribution less extensive, and benefit receipt far more widespread from a longer-run perspective. The choice of accounting period can also lead to a very different assessment of the distributional impact of policy reforms. Our results show the importance of policymakers explicitly considering what it is they are trying to achieve through redistribution: the alleviation of short-run hardship or the reduction of lifetime inequality. While there may be good reasons to pursue both objectives, the group of people affected and the appropriate policy response will differ depending on which is prioritized.

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Section: Datamentioning

confidence: 99%

What a difference a day makes: inequality and the tax and benefit system from a long-run perspective

Roantree

Shaw

2017

J Econ Inequal

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“…However, there are reasons to suspect that a program such as the New Deal will 6. See Heckman (1979), Heckman and Robb (1986), Blundell, Duncan, and Meghir (1998), Bell, Blundell, and Van Reenen (1999) and Blundell and Costa Dias (2000) for precise descriptions of these conditions. Davidson and Woodbury (1993) is an example of an attempted calibration of substitution effects using data from the Illinois unemployment insurance (UI) experiments (see also Woodbury and Spiegelman 1987 on this program). have more sustainable effects than other labor market programs.…”

Section: Introductionmentioning

confidence: 99%

Evaluating the Employment Impact of a Mandatory Job Search Program

Blundell¹,

Dias²,

Meghir³

2016

Labor Supply and Taxation

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This paper exploits area-based piloting and age-related eligibility rules to identify treatment effects of a labor market program-the New Deal for Young People in the U.K. A central focus is on substitution/displacement effects and on equilibrium wage effects. The program includes extensive job assistance and wage subsidies to employers. We find that the impact of the program significantly raised transitions to employment by about 5 percentage points. The impact is robust to a wide variety of nonexperimental estimators. However, we present some evidence that this effect may not be as large in the longer run. (JEL: J18, J23, J38)

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“…Finally, the grouped data literature identifies the labor supply elasticities by estimating group-average regressions over a long time period (see e.g. Blau & Kahn, 2007;Causa, 2009;Blundell, Duncan, & Meghir, 1998;Devereux, 2004).…”

Section: Introductionmentioning

confidence: 99%

Tax and transfer policies and the female labor supply in the EU

Kalíšková

2018

Empir Econ

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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. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. This study contributes to the female labor supply responsiveness literature by measuring the effect of tax-benefit policies on female labor supply based on a broad sample of 26 European countries in 2005-2010. The tax-benefit microsimulation model EUROMOD is used to calculate a measure of work incentives at the extensive margin -the participation tax rate, which is then used as the main explanatory variable in a female employment equation. This allows me to deal with the endogeneity of income in a new way by using a simulated instrumental variable based on a fixed EU-wide sample of women. Results suggest that a 10 percentage point increase in the participation tax rate decreases the female employment probability by 2 percentage points. The effect is higher for single mothers, for women in the middle of the skills distribution, and in countries that have lower rates of female employment.JEL Classification: C25, H24, H31, J22

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Estimating Labor Supply Responses Using Tax Reforms

Cited by 110 publications

References 0 publications

What a difference a day makes: inequality and the tax and benefit system from a long-run perspective

What a difference a day makes: inequality and the tax and benefit system from a long-run perspective

Evaluating the Employment Impact of a Mandatory Job Search Program

Tax and transfer policies and the female labor supply in the EU

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