The non - equivalence of labour market taxes a real - effert experiment Matthias Weber and Arthur Schram
By: Weber, Matthias
.
Contributor(s): Schram, Arthur.
Material type: 
ArticlePublisher: 2017Subject(s): MERCADO DE TRABAJO | RENDIMIENTOS DE TRABAJO | IMPUESTOS
In:
The economic journal v. 127, n. 604, September 2017, p. 2187-2215Summary: Under full rationality, a labour market tax levied on employers and a corresponding income tax levied on employees are equivalent. With boundedly rational agents, this equivalence is no longer obvious. In a real-effort experiment, we study the effects of these taxes on preferences concerning the size of the public sector, subjective well-being, labour supply and on-the-job performance. Our findings suggest that employer-side taxes induce preferences for a largerpublic sector. Subjective well-being is higher under employer-side taxes while labour supply is lower, at least at the extensivemargin. We discuss three mechanisms that may underlie these results.
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| OP 282/2017/601-1 Income taxes, sorting and the costs of housing | OP 282/2017/601-2 Income inequality, tax policy and economic growth | OP 282/2017/604-1 Distributional impacts of fat taxes and thin subsidies | OP 282/2017/604-2 The non - equivalence of labour market taxes | OP 282/2017/606 Taxing externalities under financing constraints | OP 282/2018/609 The Economic Journal | OP 282/2018/610 The Economic Journal |
Disponible también en línea a través de la Biblioteca del Instituto de Estudios Fiscales. Resumen. Bibliografía. Anexo.
Under full rationality, a labour market tax levied on employers and a corresponding income tax levied on employees are equivalent. With boundedly rational agents, this equivalence is no longer obvious. In a real-effort experiment, we study the effects of these taxes on preferences concerning the size of the public sector, subjective well-being, labour supply and on-the-job performance. Our findings suggest that employer-side taxes induce preferences for a largerpublic sector. Subjective well-being is higher under employer-side taxes while labour supply is lower, at least at the extensivemargin. We discuss three mechanisms that may underlie these results.
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