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Estimating the effects of personal income tax on labour supply in Italy

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  • D. Tondani

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Abstract

In this paper we attempt to estimate labour supply elasticities for four categories of Italian workers: married men, married women, unmarried men, unmarried women. We use microdata provided by the Bank of Italy 2002 survey adopting a piecewise linear labour supply functional form. Sample selection and tobit technique have been used. Wage elasticities are calculated from the results of the labour supply estimation. Hours of work are found to be positively related to after tax labour income and negatively related to virtual income. Female labour supply is more sensitive than that of males to an increase in net wage.

Suggested Citation

  • D. Tondani, 2006. "Estimating the effects of personal income tax on labour supply in Italy," Economics Department Working Papers 2006-EP03, Department of Economics, Parma University (Italy).
  • Handle: RePEc:par:dipeco:2006-ep03
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    References listed on IDEAS

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    1. F. Calidoni, 2005. "The effects of public transfers on productivity," Economics Department Working Papers 2005-EP01, Department of Economics, Parma University (Italy).
    2. Francesco Daveri & Cecilia Jona-Lasinio, 2005. "Italy's Decline: Getting the Facts Right," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 64(4), pages 365-410, December.
    3. Arfini, Filippo & Donati, Michele & Menozzi, Davide, 2005. "Analysis of the Socio-Economic Impact of the Tobacco CMO Reform on Italian Tobacco Sector," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24481, European Association of Agricultural Economists.
    4. D. Adorni & S. Magagnoli, 2005. "L'esperienza di decentramento istituzionale in Italia e lo sviluppo locale," Economics Department Working Papers 2005-ST03, Department of Economics, Parma University (Italy).
    5. S. Magagnoli, 2005. "Fascismo: organizzazione dello Stato e sistema economico," Economics Department Working Papers 2005-ST01, Department of Economics, Parma University (Italy).
    6. A. Lanzavecchia & L. Poletti, 2005. "Social and alternative banking: project selection and monitoring after the New Basel Capital Accord," Economics Department Working Papers 2005-EF01, Department of Economics, Parma University (Italy).
    7. A. Arrighetti & F. Traù, 2006. "Struttura industriale e architetture organizzative. Ipotesi sul "ritorno" della gerarchia," Economics Department Working Papers 2006-EP02, Department of Economics, Parma University (Italy).
    8. S. Magagnoli, 2005. "Istituzioni, sviluppo e sistema sociale: il caso padano," Economics Department Working Papers 2005-ST02, Department of Economics, Parma University (Italy).
    9. M. Magnani, 2005. "Labour market regulation and retirement age," Economics Department Working Papers 2005-EP02, Department of Economics, Parma University (Italy).
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    Citations

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    Cited by:

    1. Karsten Staehr, 2008. "Estimates of employment and welfare effects of personal labour income taxation in a flat-tax country : The case of Estonia," Bank of Estonia Working Papers 2008-03, Bank of Estonia, revised 30 Oct 2008.
    2. Oybek Yuldashev & Obid Khakimov, 2011. "Income Taxation And Labor Force Participation In Transition Economies: Evidence From Bulgaria, Russian Federation And Serbia," Anadolu University Journal of Social Sciences, Anadolu University, vol. 11(3), pages 177-198, September.
    3. Karsten STAEHR, "undated". "Estimates of Employment and Welfare Effects of Labour Income Taxation in a Country with a Flat: the Case of Estonia," EcoMod2008 23800135, EcoMod.

    More about this item

    Keywords

    Labour supply; Personal income taxation; Italy;

    JEL classification:

    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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