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Title: Can Progressive Taxation Account for Cross-Country Variation in Labor Supply?
Citation Type: Conference Paper
Publication Year: 2011
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Abstract: The difference between average hours worked in the US and average hours worked in Continental European countries has been increasing since the early 1970s. To explain this phenomenon, this paper develops an endogenous growth model with two key properties: agents are heterogeneous in their rates of time preference and labor skills, and the model incorporates progressive income taxes. The model is calibrated to US and German data for the periods 1971-1974 and 1986-1989. Our findings suggest that the degree of progressivity is a major factor in explaining the patterns of the US and German labor supply over time. Predictions of the model also match the distributional trends in both countries during this time period. (C) 2011 Elsevier B.V. All rights reserved.
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Authors: Koyuncu, Murat
Conference Name: Workshop on Growth, Dynamics, and Economic Policy in honor of Stephen J Turnovsky
Publisher Location: Vienna, Austria
Data Collections: IPUMS CPS, IPUMS Health Surveys - NHIS
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