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Sumiya KAZUHIKO (Aarhus) – “Accumulating Effects of Income Taxes on Wages: Micro Evidence from Denmark”.

June 4, 12:15 pm - 1:30 pm

Time: 12:15pm – 13:30 pm
Date: 04th of June 2018
Place: Room 3001

Sumiya KAZUHIKO (Aarhus) – “Accumulating Effects of Income Taxes on Wages: Micro Evidence from Denmark”.

Abstract : Do income taxes create accumulating effects over time on pre-tax hourly wages by distorting on-the-job human capital accumulation? This paper provides micro evidence by exploiting administrative data and a tax reform in Denmark. After non-parametrically controlling for pre-reform income and covariates, I present graphical evidence and difference-in-differences (DID) estimates showing accumulating effects of taxes on wages. Further, I find suggestive evidence that learning-by-doing is the underlying channel. However, I do not find significant effects of taxes on participation in on-the-job training courses. To understand welfare implications of my findings, I construct a labor supply model with endogenous wage dynamics as a conceptual framework. Guided by the model, the DID estimates imply that the wage response has a larger impact on welfare than the hour response and that both responses create accumulating effects on welfare.​

 

Details

Date:
June 4
Time:
12:15 pm - 1:30 pm
Event Categories:
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Organizers

Edouard CHALLE
Julien PRAT