Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/234912 
Year of Publication: 
2020
Series/Report no.: 
ISER Discussion Paper No. 1100
Publisher: 
Osaka University, Institute of Social and Economic Research (ISER), Osaka
Abstract: 
We investigate the labor supply reaction to wage cuts and tax increases using a real-effort experiment. First, subjects perform a task and receive a reward with taxes deducted. Second, the wage cut treatment reduces the wage rate and the tax increase treatment increases the tax; wage and tax remain unchanged for the control group. The real wage is equal for both treatments, and both treatments had significantly smaller increases in effort levels than the control group. The effort level change did not differ between the treatments. Therefore, the net wage illusion and tax aversion identified in previous studies are absent.
Subjects: 
labor supply
net wage illusion
tax aversion
JEL: 
C91
H24
J24
Document Type: 
Working Paper

Files in This Item:
File
Size
276.62 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.