IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Labour Supply and Income Taxation: Estimation and Simulation Exercise for Finland

  • Mika Kuismanen

    ()

    (European Central Bank, Research Department, Germany)

Registered author(s):

    It is well known that the estimation of a labour supply function is complicated because of the non-linear budget constraint an individual faces. This non-linearity may arise from a variety of reasons - the structure of the tax/benefit scheme, overtime rates etc. Non-linearities also cause problems when it comes to interpreting the policy implications of the estimates. In this study we first estimate two well-structured econometric labour supply models which mimic the actual budget constraints as closely as possible. Utilising estimation results we construct a microsimulation model to analyse different income tax regimes and systems to the labour supply. Our simulation results show that none of the proposed reforms are self-financing. A revenue neutral proportional tax system does not have major effects on labour supply. The biggest behavioural responses are achieved if we reduce the marginal tax rates from the lower end of the state income tax schedule.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.taloustieteellinenyhdistys.fi/images/stories/fep/fep12005_kuismanen.pdf
    Download Restriction: no

    Article provided by Finnish Economic Association in its journal Finnish Economic Papers.

    Volume (Year): 18 (2005)
    Issue (Month): 1 (Spring)
    Pages: 16-18

    as
    in new window

    Handle: RePEc:fep:journl:v:18:y:2005:i:1:p:16-18
    Contact details of provider: Web page: http://www.taloustieteellinenyhdistys.fi

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:fep:journl:v:18:y:2005:i:1:p:16-18. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Editorial Secretary)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.