The own-wage elasticity of labor demand: A meta-regression analysis

Lichter, Andreas; Peichl, Andreas; Siegloch, Sebastian

doi:10.1016/j.euroecorev.2015.08.007

Cited by 134 publications

(103 citation statements)

References 17 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Instead, we present changes in aggregate distributional measures in Figure 6 for payroll tax incidence values of 100%, 75%, 50%, 25% and 0% respectively. As labor demand is typically estimated to be more elastic than labor supply (Lichter et al, 2014), an incidence share of more than 50% for employees seems most realistic. Incidence below 100% causes employees to gain less from a payroll tax reduction and hence weakens the positive e ect on work incentives.…”

Section: Sensitivity Analysismentioning

confidence: 99%

Shifting Taxes from Labor to Consumption: More Employment and More Inequality

Pestel

Sommer

2015

SSRN Journal

View full text Add to dashboard Cite

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Abstract This paper investigates the e ect of shifting taxes from labor income to consumption on labor supply and the distribution of income in Germany. We simulate stepwise increases in the value-added tax (VAT) rate, which are compensated by revenue-neutral reductions in income-related taxes. We di erentiate between the personal income tax (PIT) and social security contributions (SSC). Based on a dual data base and a microsimulation model of household labor supply behavior, we find a regressive impact of such a tax shift in the short run. When accounting for labor supply adjustments, the adverse distributional impact persists for PIT reductions, while the overall e ects on inequality and progressivity become lower when payroll taxes are reduced. This is partly due to increases in aggregate labor supply, resulting from higher work incentives. Shifting Taxes from Labor to JEL Classification: C63, D31, H23Keywords: income and payroll taxes, consumption taxes, microsimulation, inequality, Germany ú Nico Pestel (pestel@iza.org) is a liated to IZA Bonn and the Center for European Economic Research (ZEW) Mannheim. Eric Sommer (sommer@iza.org) is a liated to IZA Bonn and the University of Cologne. Corresponding author: Eric Sommer, IZA Bonn,

show abstract

Section: Sensitivity Analysismentioning

confidence: 99%

Shifting Taxes from Labor to Consumption: More Employment and More Inequality

Pestel

Sommer

2015

SSRN Journal

View full text Add to dashboard Cite

show abstract

“…In Section 3.1 I explain the meta 3 Card and Krueger (1995) and Card et al (2010Card et al ( , 2015 are three examples that look into the field of labor economics. Havránek (2015) examines the literature on intertemporal substitution elasticities and Lichter et al (2015) study labor demand elasticities. Moreover, there is a large body of literature on publication bias (see Rothstein et al (2006) for a review and Brodeur et al (2016) for an application).…”

Section: Introductionmentioning

confidence: 99%

The Elasticity of Taxable Income: A Meta-Regression Analysis

Neisser

2017

SSRN Journal

View full text Add to dashboard Cite

The IEB research program in Tax Systems Analysis aims at promoting high quality research in the field of taxation, taking into account not only the traditional approach to optimal taxation, but also administrative issues and the decentralization or globalization context. The ultimate aim of the program is to generate socially useful knowledge in this field. Special emphasis is put on empirical research, and on the analysis of the Spanish Tax System. The program enjoys the support from the IEB-Foundation. The IEB working papers represent ongoing research that is circulated to encourage discussion and has not undergone a peer review process. Any opinions expressed here are those of the author(s) and not those of IEB. IEB Working Paper 2017/10 THE ELASTICITY OF TAXABLE INCOME:A META-REGRESSION ANALYSIS * Carina NeisserABSTRACT: The elasticities of taxable (ETI) and broad income (EBI) are key parameters in optimal tax and welfare analysis. To examine the large variation in estimates found in the literature, I conduct a comprehensive meta-regression analysis of elasticities that measure behavioral responses to income taxation using information from 51 different studies containing 1,420 estimates. I find that heterogeneity in reported estimates is driven by regression techniques, sample restrictions and variations across countries and time.Moreover, I provide descriptive evidence of the correlation between contextual factors and the magnitude of an elasticity estimate. Overall, the study confirms the fact that the ETI itself is endogenous to the underlying tax system. I also document that selective reporting bias is prevalent in the literature. The direction of reporting bias depends on whether or not deductions are included in the tax base.JEL Codes: C81, H24, H26

show abstract

“…Lichter et al (2014) show in their meta---analysis that 80 % of the studies estimate labor demand elasticities be---tween 0 and ---1, the average denoting at ---0.51. Especially in the low---wage sector and among low---qualified employees some studies identify elasticities of around ---1 (Arni et al 2014, Sinn et al 2006, Fitzenberger and Franz 1998.…”

Section: Modelling Employment Effects Of the Minimum Wage 43mentioning

confidence: 99%

Potential Effects of a Statutory Minimum Wage on the Gender Pay Gap A Simulation-Based Study for Germany

et al. 2015

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Terms of use: Documents in AbstractIn a simulation---based study with data from the German Socio---Economic Panel Study(SOEP), we analyze the effects of the newly introduced statutory minimum wage of 8.50 Eu---ro per working hour in Germany on the gender wage gap. In our first scenario where we abstain from employment effects, the pay differential is reduced by 2.5 percentage points from 19.6 % to 17.1 %, due to a reduction of the sticky---floor effect at the bottom of the wage distribution. In more realistic scenarios where we incorporate minimum wage effects on la---bor demand, a further reduction of the pay gap by 0.2 pp (1.2 pp) in case of a monopsonistic (neoclassical) labor market is achieved. However, this comes at the cost of job losses by which women are more strongly affected than men. The magnitude of job losses ranges be---tween 0.2 % and 3.0 % of all employees. It is higher in a neoclassical market setting and posi---tively related to the assumed wage elasticity.

show abstract

The own-wage elasticity of labor demand: A meta-regression analysis

Cited by 134 publications

References 17 publications

Shifting Taxes from Labor to Consumption: More Employment and More Inequality

Shifting Taxes from Labor to Consumption: More Employment and More Inequality

The Elasticity of Taxable Income: A Meta-Regression Analysis

Potential Effects of a Statutory Minimum Wage on the Gender Pay Gap A Simulation-Based Study for Germany

Contact Info

Product

Resources

About