Job Search, Efficiency Wages and Taxes

Alex Bryson and Harald Dale-Olsen ()
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Harald Dale-Olsen: Institute for Social Research, Oslo

No 17385, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Norwegian workers' job mobility decisions are related to firms' wage policies, but also depend on the national tax schedule. By utilising Norwegian population-wide administrative linked employer-employee data on workers and firms between 2010-2019, we study how the job-to-job turnover of employees is affected by marginal taxes and firms' pay policies, enabling inferences to be made about on-the-job search. Paying higher wages is associated with a drop in job-to-job separation rates, but this negative relationship is weakened when income taxes increase. Higher taxes imply strictly reduced search activity, but less so for bonus job-workers than salaried workers.

Keywords: job search; marginal taxes; monopsony; wages; effort (search for similar items in EconPapers)
JEL-codes: H24 J42 J63 M12 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2024-10
New Economics Papers: this item is included in nep-hrm, nep-lma, nep-ltv and nep-pbe
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