The impact of income taxation on the ratio between reservation and market wages and the incentives for labour supply
By: by Marco Caliendo, Ludovica Gambaro, Peter Haan.
Contributors: Gambaro, Ludovica.
Series: Discussion paper -- no. 2599; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) -- no. 2599
Publisher: IZA
Published: 2007
Place of publication: Bonn, Germany
Language: eng
Format: Electronic resource
Subjects: Income tax -- Germany.; Wages -- Germany.; Labor supply -- Germany.
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"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Title from PDF file as viewed on 4/20/2007.

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