Time to Retire? The Effect of State Fiscal Policies on Retirement Decisions
Our 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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Volume (Year): 101 (2011)
Issue (Month): 3 (May)
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References listed on IDEAS
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- Courtney Coile & Jonathan Gruber, 2007. "Future Social Security Entitlements and the Retirement Decision," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 234-246, May.
- Jon Bakija & Joel Slemrod, 2004.
"Do the Rich Flee from High State Taxes? Evidence from Federal Estate Tax Returns,"
NBER Working Papers
10645, National Bureau of Economic Research, Inc.
- 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.
- Lucie Schmidt & Purvi Sevak, 2006.
"Taxes, Wages, and the Labor Supply of Older Americans,"
wp139, University of Michigan, Michigan Retirement Research Center.
- Lucie Schmidt & Purvi Sevak, 2008. "Taxes, Wages, and the Labor Supply of Older Americans," Department of Economics Working Papers 2008-16, Department of Economics, Williams College.
- Rogowski, Jeannette & Karoly, Lynn, 2000. "Health insurance and retirement behavior: evidence from the health and retirement survey," Journal of Health Economics, Elsevier, vol. 19(4), pages 529-539, July.
- 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.
- Gurley–Calvez, Tami & Bruce, Donald, 2008. "Do Tax Cuts Promote Entrepreneurial Longevity?," National Tax Journal, National Tax Association, vol. 61(2), pages 225-50, June.
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