Discrete Labor Supply: Empirical Evidence and Implications
Kosonen, Tuomas; Matikka, Tuomas (2020-05-25)
Kosonen, Tuomas
Matikka, Tuomas
Valtion taloudellinen tutkimuskeskus
25.05.2020
Julkaisun pysyvä osoite on
https://urn.fi/URN:ISBN:978-952-274-254-4
https://urn.fi/URN:ISBN:978-952-274-254-4
Kuvaus
nonPeerReviewed
Tiivistelmä
We provide novel evidence of discrete labor supply responses to tax incentives and study the broader implications of discrete rather than continuous labor supply. We utilize an income notch and a reform that shifted the location of the notch in order to study the labor supply mechanisms. We find transparent evidence of discrete labor supply responses, revealing that wage earners even in the part-time labor market can face significant restrictions in their available labor supply choices. As an implication of discrete labor supply, we show that the conventional differencesin-differences and bunching elasticity estimates can be downward-biased when labor supply is discrete.
Tutkimusteema
Social security, taxation and inequality, Labour markets and education
JEL
H21, H24, J22
Avainsanat
labor supply, discrete choices, tax elasticity
Kokoelmat
- VATT Working Papers [164]