Married couple work participation and earnings elasticities: evidence from tax data
This paper uses administrative tax panel data to estimate work participation and earnings elasticities of married couples by exploiting variation in tax policy. Not only may individuals alter labor supply by working more or less in response to changes in tax policy, they may also alter reported earn...
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| Veröffentlicht in: | International tax and public finance 2017-12, Vol.24 (6), p.997-1025 |
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| container_title | International tax and public finance |
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| creator | Lin, Emily Y. Tong, Patricia K. |
| description | This paper uses administrative tax panel data to estimate work participation and earnings elasticities of married couples by exploiting variation in tax policy. Not only may individuals alter labor supply by working more or less in response to changes in tax policy, they may also alter reported earnings or shift income between taxable and tax-deferred compensation. As a result, in addition to estimating the standard extensive and intensive labor supply elasticities, we also examine elasticities by type of income (wage earnings vs. self-employment earnings) and compensation (taxable vs. tax-deferred). We find that wives have more elastic work participation and earnings than husbands. Furthermore, self-employment income is more responsive to net-of-tax price changes than wage earnings for both husbands and wives, suggesting that it is easier for the self-employed to alter their work hours, work intensity, and/or reported income than wage earners. Finally, we find that wives respond to changes in the net-of-tax price of earnings by altering the amount of earnings subject to current-year taxes through adjustments of tax-deferred contributions to employer-provided retirement accounts. |
| doi_str_mv | 10.1007/s10797-017-9470-3 |
| format | Article |
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Not only may individuals alter labor supply by working more or less in response to changes in tax policy, they may also alter reported earnings or shift income between taxable and tax-deferred compensation. As a result, in addition to estimating the standard extensive and intensive labor supply elasticities, we also examine elasticities by type of income (wage earnings vs. self-employment earnings) and compensation (taxable vs. tax-deferred). We find that wives have more elastic work participation and earnings than husbands. Furthermore, self-employment income is more responsive to net-of-tax price changes than wage earnings for both husbands and wives, suggesting that it is easier for the self-employed to alter their work hours, work intensity, and/or reported income than wage earners. Finally, we find that wives respond to changes in the net-of-tax price of earnings by altering the amount of earnings subject to current-year taxes through adjustments of tax-deferred contributions to employer-provided retirement accounts.</description><identifier>ISSN: 0927-5940</identifier><identifier>EISSN: 1573-6970</identifier><identifier>DOI: 10.1007/s10797-017-9470-3</identifier><language>eng</language><publisher>New York: Springer US</publisher><subject>Business Taxation/Tax Law ; Changes ; Compensation ; Deferred compensation ; Dual career couples ; Earnings ; Economic models ; Economics ; Economics and Finance ; Elasticity ; Employers ; Employment ; Fiscal policy ; Husbands ; Income taxes ; Labor force participation ; Labor supply ; Married couples ; Panel data ; Participation ; Policy making ; Prices ; Public Finance ; Retirement ; Self employment ; Taxation ; Wages & salaries ; Wives ; Work ; Working hours</subject><ispartof>International tax and public finance, 2017-12, Vol.24 (6), p.997-1025</ispartof><rights>Springer Science+Business Media, LLC (outside the USA) 2017</rights><rights>International Tax and Public Finance is a copyright of Springer, (2017). All Rights Reserved.</rights><lds50>peer_reviewed</lds50><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c381t-160a56c1d3a1e8e3e05f1ba48307d3dfa12ae46a6c1a857ccd94226a613af0a23</citedby><cites>FETCH-LOGICAL-c381t-160a56c1d3a1e8e3e05f1ba48307d3dfa12ae46a6c1a857ccd94226a613af0a23</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktopdf>$$Uhttps://link.springer.com/content/pdf/10.1007/s10797-017-9470-3$$EPDF$$P50$$Gspringer$$H</linktopdf><linktohtml>$$Uhttps://link.springer.com/10.1007/s10797-017-9470-3$$EHTML$$P50$$Gspringer$$H</linktohtml><link.rule.ids>314,777,781,27847,27905,27906,41469,42538,51300</link.rule.ids></links><search><creatorcontrib>Lin, Emily Y.</creatorcontrib><creatorcontrib>Tong, Patricia K.</creatorcontrib><title>Married couple work participation and earnings elasticities: evidence from tax data</title><title>International tax and public finance</title><addtitle>Int Tax Public Finance</addtitle><description>This paper uses administrative tax panel data to estimate work participation and earnings elasticities of married couples by exploiting variation in tax policy. Not only may individuals alter labor supply by working more or less in response to changes in tax policy, they may also alter reported earnings or shift income between taxable and tax-deferred compensation. As a result, in addition to estimating the standard extensive and intensive labor supply elasticities, we also examine elasticities by type of income (wage earnings vs. self-employment earnings) and compensation (taxable vs. tax-deferred). We find that wives have more elastic work participation and earnings than husbands. Furthermore, self-employment income is more responsive to net-of-tax price changes than wage earnings for both husbands and wives, suggesting that it is easier for the self-employed to alter their work hours, work intensity, and/or reported income than wage earners. Finally, we find that wives respond to changes in the net-of-tax price of earnings by altering the amount of earnings subject to current-year taxes through adjustments of tax-deferred contributions to employer-provided retirement accounts.</description><subject>Business Taxation/Tax Law</subject><subject>Changes</subject><subject>Compensation</subject><subject>Deferred compensation</subject><subject>Dual career couples</subject><subject>Earnings</subject><subject>Economic models</subject><subject>Economics</subject><subject>Economics and Finance</subject><subject>Elasticity</subject><subject>Employers</subject><subject>Employment</subject><subject>Fiscal policy</subject><subject>Husbands</subject><subject>Income taxes</subject><subject>Labor force participation</subject><subject>Labor supply</subject><subject>Married couples</subject><subject>Panel data</subject><subject>Participation</subject><subject>Policy making</subject><subject>Prices</subject><subject>Public Finance</subject><subject>Retirement</subject><subject>Self employment</subject><subject>Taxation</subject><subject>Wages & salaries</subject><subject>Wives</subject><subject>Work</subject><subject>Working hours</subject><issn>0927-5940</issn><issn>1573-6970</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2017</creationdate><recordtype>article</recordtype><sourceid>7TQ</sourceid><sourceid>ABUWG</sourceid><sourceid>AFKRA</sourceid><sourceid>BENPR</sourceid><sourceid>CCPQU</sourceid><sourceid>DWQXO</sourceid><recordid>eNp1kMtOwzAQRS0EEqXwAewssTbMxEkcs0MVL6mIBbC2hnhSubRJsFMef0-qsmDDajSac-9IR4hThHMEMBcJwVijAI2yuQGl98QEC6NVaQ3siwnYzKjC5nAojlJaAoA11k7E0wPFGNjLutv0K5afXXyTPcUh1KGnIXStpNZLptiGdpEkryhtb0PgdCn5I3hua5ZN7NZyoC_paaBjcdDQKvHJ75yKl5vr59mdmj_e3s-u5qrWFQ4KS6CirNFrQq5YMxQNvlJeaTBe-4YwI85LGhGqClPX3uZZNu6oqQHK9FSc7Xr72L1vOA1u2W1iO750aEs0OeqiGincUXXsUorcuD6GNcVvh-C27tzOnRvdua07p8dMtsukkW0XHP80_xv6AT8xcjk</recordid><startdate>20171201</startdate><enddate>20171201</enddate><creator>Lin, Emily Y.</creator><creator>Tong, Patricia K.</creator><general>Springer US</general><general>Springer Nature B.V</general><scope>AAYXX</scope><scope>CITATION</scope><scope>3V.</scope><scope>7TQ</scope><scope>7WY</scope><scope>7WZ</scope><scope>7X1</scope><scope>7XB</scope><scope>87Z</scope><scope>8A9</scope><scope>8AO</scope><scope>8BJ</scope><scope>8FK</scope><scope>8FL</scope><scope>ABUWG</scope><scope>AFKRA</scope><scope>ANIOZ</scope><scope>BENPR</scope><scope>BEZIV</scope><scope>CCPQU</scope><scope>DHY</scope><scope>DON</scope><scope>DWQXO</scope><scope>FQK</scope><scope>FRAZJ</scope><scope>FRNLG</scope><scope>F~G</scope><scope>JBE</scope><scope>K60</scope><scope>K6~</scope><scope>L.-</scope><scope>M0C</scope><scope>PQBIZ</scope><scope>PQBZA</scope><scope>PQEST</scope><scope>PQQKQ</scope><scope>PQUKI</scope><scope>PRINS</scope><scope>Q9U</scope></search><sort><creationdate>20171201</creationdate><title>Married couple work participation and earnings elasticities: evidence from tax data</title><author>Lin, Emily Y. ; Tong, Patricia K.</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c381t-160a56c1d3a1e8e3e05f1ba48307d3dfa12ae46a6c1a857ccd94226a613af0a23</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2017</creationdate><topic>Business Taxation/Tax Law</topic><topic>Changes</topic><topic>Compensation</topic><topic>Deferred compensation</topic><topic>Dual career couples</topic><topic>Earnings</topic><topic>Economic models</topic><topic>Economics</topic><topic>Economics and Finance</topic><topic>Elasticity</topic><topic>Employers</topic><topic>Employment</topic><topic>Fiscal policy</topic><topic>Husbands</topic><topic>Income taxes</topic><topic>Labor force participation</topic><topic>Labor supply</topic><topic>Married couples</topic><topic>Panel data</topic><topic>Participation</topic><topic>Policy making</topic><topic>Prices</topic><topic>Public Finance</topic><topic>Retirement</topic><topic>Self employment</topic><topic>Taxation</topic><topic>Wages & salaries</topic><topic>Wives</topic><topic>Work</topic><topic>Working hours</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Lin, Emily Y.</creatorcontrib><creatorcontrib>Tong, Patricia K.</creatorcontrib><collection>CrossRef</collection><collection>ProQuest Central (Corporate)</collection><collection>PAIS Index</collection><collection>ABI/INFORM Collection</collection><collection>ABI/INFORM Global (PDF only)</collection><collection>Accounting & Tax Database</collection><collection>ProQuest Central (purchase pre-March 2016)</collection><collection>ABI/INFORM Global (Alumni Edition)</collection><collection>Accounting & Tax Database (Alumni Edition)</collection><collection>ProQuest Pharma Collection</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>ProQuest Central (Alumni) (purchase pre-March 2016)</collection><collection>ABI/INFORM Collection (Alumni Edition)</collection><collection>ProQuest Central (Alumni Edition)</collection><collection>ProQuest Central UK/Ireland</collection><collection>Accounting, Tax & Banking Collection</collection><collection>ProQuest Central</collection><collection>Business Premium Collection</collection><collection>ProQuest One Community College</collection><collection>PAIS International</collection><collection>PAIS International (Ovid)</collection><collection>ProQuest Central Korea</collection><collection>International Bibliography of the Social Sciences</collection><collection>Accounting, Tax & Banking Collection (Alumni)</collection><collection>Business Premium Collection (Alumni)</collection><collection>ABI/INFORM Global (Corporate)</collection><collection>International Bibliography of the Social Sciences</collection><collection>ProQuest Business Collection (Alumni Edition)</collection><collection>ProQuest Business Collection</collection><collection>ABI/INFORM Professional Advanced</collection><collection>ABI/INFORM Global</collection><collection>One Business (ProQuest)</collection><collection>ProQuest One Business (Alumni)</collection><collection>ProQuest One Academic Eastern Edition (DO NOT USE)</collection><collection>ProQuest One Academic</collection><collection>ProQuest One Academic UKI Edition</collection><collection>ProQuest Central China</collection><collection>ProQuest Central Basic</collection><jtitle>International tax and public finance</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Lin, Emily Y.</au><au>Tong, Patricia K.</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Married couple work participation and earnings elasticities: evidence from tax data</atitle><jtitle>International tax and public finance</jtitle><stitle>Int Tax Public Finance</stitle><date>2017-12-01</date><risdate>2017</risdate><volume>24</volume><issue>6</issue><spage>997</spage><epage>1025</epage><pages>997-1025</pages><issn>0927-5940</issn><eissn>1573-6970</eissn><abstract>This paper uses administrative tax panel data to estimate work participation and earnings elasticities of married couples by exploiting variation in tax policy. Not only may individuals alter labor supply by working more or less in response to changes in tax policy, they may also alter reported earnings or shift income between taxable and tax-deferred compensation. As a result, in addition to estimating the standard extensive and intensive labor supply elasticities, we also examine elasticities by type of income (wage earnings vs. self-employment earnings) and compensation (taxable vs. tax-deferred). We find that wives have more elastic work participation and earnings than husbands. Furthermore, self-employment income is more responsive to net-of-tax price changes than wage earnings for both husbands and wives, suggesting that it is easier for the self-employed to alter their work hours, work intensity, and/or reported income than wage earners. Finally, we find that wives respond to changes in the net-of-tax price of earnings by altering the amount of earnings subject to current-year taxes through adjustments of tax-deferred contributions to employer-provided retirement accounts.</abstract><cop>New York</cop><pub>Springer US</pub><doi>10.1007/s10797-017-9470-3</doi><tpages>29</tpages></addata></record> |
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| subjects | Business Taxation/Tax Law Changes Compensation Deferred compensation Dual career couples Earnings Economic models Economics Economics and Finance Elasticity Employers Employment Fiscal policy Husbands Income taxes Labor force participation Labor supply Married couples Panel data Participation Policy making Prices Public Finance Retirement Self employment Taxation Wages & salaries Wives Work Working hours |
| title | Married couple work participation and earnings elasticities: evidence from tax data |
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