American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Taxes, Social Subsidies, and the Allocation of Work Time
American Economic Journal: Macroeconomics
vol. 3,
no. 4, October 2011
(pp. 1–26)
Abstract
We examine the allocation of hours of work across industrial sectors in OECD countries. We find large disparities across three sector groups, one that produces goods without home substitutes, and two others that have home substitutes but are treated differently by welfare policy. We attribute the disparities to the countries' tax and subsidy policies. High taxation substantially reduces hours in sectors that have close home substitutes but less so in other sectors. Subsidies increase hours in the subsidized sectors that have home substitutes. We compute these policy effects for 19 OECD countries. (JEL H24, H31, J22)Citation
Ngai, L. Rachel, and Christopher A. Pissarides. 2011. "Taxes, Social Subsidies, and the Allocation of Work Time." American Economic Journal: Macroeconomics 3 (4): 1–26. DOI: 10.1257/mac.3.4.1Additional Materials
JEL Classification
- 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