Time to Retire? The Effect of State Fiscal Policies on Retirement Decisions
AbstractOur research addresses the importance of state fiscal policies on the probability of retirement using a panel of individual tax return data. Results indicate that a one percentage point increase in the income or sales tax rate reduces the probability of retirement by about 8.7 percent. The evidence suggests that state spending might also affect retirement decisions but magnitudes are inconclusive. In general, the results suggest that the income effect dominates; that is, higher tax rates at the state-level reduce disposable income and decrease the probability of retiring. Results are similar in models examining single and married filers separately.
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Bibliographic InfoArticle provided by American Economic Association in its journal American Economic Review.
Volume (Year): 101 (2011)
Issue (Month): 3 (May)
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- Jon Bakija & Joel Slemrod, 2004.
"Do the Rich Flee from High State Taxes? Evidence from Federal Estate Tax Returns,"
Department of Economics Working Papers
2004-12, Department of Economics, Williams College.
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- M. Solaiman Miah & Virginia Wilcox-Gok, 2007. "Do the sick retire early? Chronic illness, asset accumulation and early retirement," Applied Economics, Taylor & Francis Journals, vol. 39(15), pages 1921-1936.
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