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Caliendo, Marco
Gambaro, Ludovica
Haan, Peter
Year of Publication: 
Series/Report no.: 
IZA Discussion Papers No. 2599
Institute for the Study of Labor (IZA), Bonn
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.
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Working Paper

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