Discrete Labor Supply: Quasi-Experimental Evidence and Implications

Tuomas Kosonen and Tuomas Matikka

No 9, Working Papers from Finnish Centre of Excellence in Tax Systems Research

Abstract: We provide quasi-experimental evidence of discrete labor supply. We utilize a novel institutional setting where a reform shifted an income notch to a higher income level, and compare earnings distributions of treated and non-treated individuals before and after the reform. We find transparent evidence of widespread changes in the earnings distribution, which is consistent with discrete but not continuous labor supply. We present a simple application for estimating changes in a distribution to detect discrete responses to local tax changes.

Keywords: discrete labor supply; tax elasticity; distributions (search for similar items in EconPapers)
JEL-codes: H21 H24 J22 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2023-04
New Economics Papers: this item is included in nep-eur, nep-lma and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in FIT Working Paper Series, Finnish Center of Excellence in Tax Systems Research
Published in VATT Working Paper Series

Downloads: (external link)
https://verotutkimus.fi/verotutkimus/wp-content/up ... -Labour-Supply-1.pdf Revised version, 2023 (application/pdf)
https://urn.fi/URN:ISBN:978-952-274-254-4 First version, 2020 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fit:wpaper:9

Access Statistics for this paper

More papers in Working Papers from Finnish Centre of Excellence in Tax Systems Research Contact information at EDIRC.
Bibliographic data for series maintained by Marjukka Hourunranta ().