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Title:Labor Market Effects of the German Tax Reform 2000 PDF Logo
Authors:Haan, Peter
Steiner, Viktor
Issue Date:2005
Series/Report no.:DIW-Diskussionspapiere 472
Abstract:In the year 2000, the German government passed the most ambitious tax reform in postwar German history aiming at a significant tax relief for households. An important aim of this tax reform was to improve work incentives and, thereby, foster employment. Drawing on data of the German Socio Economic Panel (SOEP), we analyze the work incentive and employment effects of this reform on the basis of a behavioral microsimulation model. We find that the significant reduction of marginal tax rates implied by the tax reform results in a substantial increase in labor supply, a slight reduction of market wages and an increase in employment of about 130 thousand people (full-time equivalents).
Subjects:tax reform
behavioral effects
labor market effects
JEL:J22
H31
H24
Document Type:Working Paper
Appears in Collections:DIW-Diskussionspapiere
Publikationen von Forscherinnen und Forschern des DIW

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