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Title:The Impact of Income Taxation on the Ratio between Reservation and Market Wages and the Incentives for Labour Supply PDF Logo
Authors:Caliendo, Marco
Gambaro, Ludovica
Haan, Peter
Issue Date:2007
Series/Report no.:DIW-Diskussionspapiere 670
Abstract:This paper extends previous research about the determinants of reservation wages by analysing the effect of progressive income taxation on the ratio between reservation and net market wages. Based on micro data for Germany (SOEP) we show that joint income taxation in Germany which discriminates by marital status, has a strong and highly significant impact on the reservation/market wage ratio. Relative to single filers, this leads to strong negative labour supply incentives for secondary earners and to positive incentives for first earners in married couples.
Subjects:Reservation/Market Wage Ratio
Income Taxation
Labour Supply
Microsimulation
JEL:H31
H24
J22
Document Type:Working Paper
Appears in Collections:DIW-Diskussionspapiere
Publikationen von Forscherinnen und Forschern des DIW

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