Universität zu Köln

Bartels, Charlotte and Pestel, Nico ORCID: 0000-0003-0062-9514 (2016). Short- and long-term participation tax rates and their impact on labor supply. Int. Tax Public Financ., 23 (6). S. 1126 - 1160. DORDRECHT: SPRINGER. ISSN 1573-6970

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Abstract

Generous income support programs as provided by European welfare states have often been blamed to hamper employment. This paper investigates the importance of incentives inherent in the tax-benefit system for the individual decision to take up work. Using German microdata over the period 1993-2010, we find that recent reforms in Germany increased work incentives at the extensive margin measured by the participation tax rate (PTR), particularly for low-income individuals. Work incentives are even higher if the time horizon is extended to more than one year, pointing at an overestimation of the disincentives by standard measures. Regression analysis reveals that a decrease in the PTR increases the probability of taking up work significantly.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Bartels, Charlotte UNSPECIFIED UNSPECIFIED UNSPECIFIED Pestel, Nico UNSPECIFIED orcid.org/0000-0003-0062-9514 UNSPECIFIED
URN:	urn:nbn:de:hbz:38-255177
DOI:	10.1007/s10797-016-9400-9
Journal or Publication Title:	Int. Tax Public Financ.
Volume:	23
Number:	6
Page Range:	S. 1126 - 1160
Date:	2016
Publisher:	SPRINGER
Place of Publication:	DORDRECHT
ISSN:	1573-6970
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language INCOME TAXATION; RESPONSES; EARNINGS; WORK Multiple languages Economics Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/25517