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Full-Text Articles in Social and Behavioral Sciences
The Effect Of Income Taxation On Consumption And Labor Supply, James P. Ziliak, Thomas J. Kniesner
The Effect Of Income Taxation On Consumption And Labor Supply, James P. Ziliak, Thomas J. Kniesner
Center for Policy Research
We estimate the incentive effects of income taxation in a life-cycle model of consumption and labor supply that relaxes the standard assumption of strong separability within periods. Our model permits identification of both within-period preference parameters and lifecycle preference parameters such as the inter-temporal substitution elasticity. Results indicate that consumption and hours worked are direct complements in utility, and both increase with an increase in the after-tax share and with a compensated increase in the net wage. The compensated net wage elasticity is about 0.3, nearly double the standard estimates for men in the United States that ignore within-period non-separability …
Taxes, Deadweight Loss And Intertemporal Female Labor Supply: Evidence From Panel Data, Anil Kumar
Taxes, Deadweight Loss And Intertemporal Female Labor Supply: Evidence From Panel Data, Anil Kumar
Center for Policy Research
Very few existing studies have estimated female labor supply elasticities using a U.S. panel data set, although cross-sectional studies abound. Also, most existing studies have done so in a static framework. I make an attempt to fill the gap in this literature by estimating a lifecycle-consistent specification with taxes, in a limited dependent variable framework, on a panel of married females from the PSID. Both parametric random effects and semi parametric fixed effects methods are applied. I find evidence of larger substitution effects than found in female labor supply literature with taxes, suggesting considerable distortionary effects from income taxation. The …