The Non‐Equivalence of Labour Market Taxes
A Real‐Effort Experiment
Bibliographic Data
| ID | 9708701 |
|---|---|
| Authors | Matthias Weber (0000-0002-3195-2173, CEFER, Bank of Lithuania and Vilnius University), Arthur Schram (0000-0002-1767-4998, CREED, University of Amsterdam and EUI (Florence)) |
| Year | 2017 |
| Volume | 127 |
| Issue | 604 |
| Pages | 2187-2215 |
| Publication date | 2017-09-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/ecoj.12365 |
| OpenAlex | W3125609947 |
| Language | EN |
| Citations received | 8 |
| References cited | 50 |
Under full rationality, a labour market tax levied on employers and a corresponding income tax levied on employees are equivalent. With boundedly rational agents, this equivalence is no longer obvious. In a real-effort experiment, we study the effects of these taxes on preferences concerning the size of the public sector, subjective well-being, labor supply, and on-the-job performance. Our findings suggest that employer-side taxes induce preferences for a larger public sector. Subjective well-being is higher under employer-side taxes while labor supply is lower, at least at the extensive margin. We discuss three mechanisms that may underlie these results
Economics · Economy · Equivalence (formal languages · Labour economics · Labour supply · Margin (machine learning · Microeconomics · Public sector · Rationality · Supply side · Experimental Behavioral Economics Studies · Fiscal Policy and Economic Growth · Gender, Labor, and Family Dynamics
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| Citations per year | 1.33 |
|---|---|
| Citation span | 2020 - 2025 (6) |
| Highly cited | No |