Replication data for: Income Taxes, Compensating Differentials, and Occupational Choice: How Taxes Distort the Wage-Amenity Decision
Principal Investigator(s): View help for Principal Investigator(s) David Powell; Hui Shan
Version: View help for Version V1
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Project Citation:
Powell, David, and Shan, Hui. Replication data for: Income Taxes, Compensating Differentials, and Occupational Choice: How Taxes Distort the Wage-Amenity Decision. Nashville, TN: American Economic Association [publisher], 2012. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-13. https://doi.org/10.3886/E114776V1
Project Description
Summary:
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The link between taxes and occupational choices is central for understanding the welfare impacts of income taxes. Just as taxes distort the labor-leisure decision, they may also distort the wage-amenity decision. Yet, there have been few studies on the full response along this margin. When tax rates increase, workers favor jobs with lower wages and more amenities. We introduce a two-step methodology which uses compensating differentials to characterize the tax elasticity of occupational choice. We estimate a significant compensated elasticity of 0.03, implying that a 10 percent increase in the net-oftax rate causes workers to change to a 0.3 percent higher wage job. (JEL H24, H31, J22, J24, J31)
Scope of Project
JEL Classification:
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H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
H31 Fiscal Policies and Behavior of Economic Agents: Household
J22 Time Allocation and Labor Supply
J24 Human Capital; Skills; Occupational Choice; Labor Productivity
J31 Wage Level and Structure; Wage Differentials
H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
H31 Fiscal Policies and Behavior of Economic Agents: Household
J22 Time Allocation and Labor Supply
J24 Human Capital; Skills; Occupational Choice; Labor Productivity
J31 Wage Level and Structure; Wage Differentials
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