Resource title

The Impact of Income Taxation on the Ratio between Reservation and Market Wages and the Incentives for Labour Supply

Resource image

image for OpenScout resource :: The Impact of Income Taxation on the Ratio between Reservation and Market Wages and the Incentives for Labour Supply

Resource description

This paper extends previous research about the determinants of reservation wages by analysing the effect of progressive income taxation on the ratio between reservation and net market wages. Based on micro data for Germany (SOEP) we show that joint income taxation in Germany which discriminates by marital status, has a strong and highly significant impact on the reservation/market wage ratio. Relative to single filers, this leads to strong negative labour supply incentives for secondary earners and to positive incentives for first earners in married couples.

Resource author

Marco Caliendo, Ludovica Gambaro, Peter Haan

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/18402

Resource license

Adapt according to the presented license agreement and reference the original author.