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The Evolution of Taxes and Hours Worked in Austria, 1970-2005

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Listed author(s):
  • Dalton, John

Abstract

Aggregate hours worked per working-age person decreased in Austria by 25% from 1970 to 2005. During the same time period, taxes increased, particularly the effective marginal tax rate on labor income. Using a standard general equilibrium growth model with taxes, I quantitatively assess the role played by the evolution of taxes on the evolution of hours worked in Austria. The model accounts for 76% of the observed decrease in hours worked per working-age person. My results are in line with other studies, such as Prescott (2002), which find taxes play an important role in explaining aggregate hours worked.

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File URL: https://mpra.ub.uni-muenchen.de/48222/1/MPRA_paper_48222.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 48222.

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Date of creation: May 2012
Handle: RePEc:pra:mprapa:48222
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Keywords: taxes; labor supply; growth accounting; dynamic general equilibrium;

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Find related papers by JEL classification:
  • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
  • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
  • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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  1. Juan Carlos Conesa & Timothy J. Kehoe, 2017. "Productivity, Taxes, and Hours Worked in Spain: 1970–2015," NBER Working Papers 23592, National Bureau of Economic Research, Inc.
  2. Ohanian, Lee & Raffo, Andrea & Rogerson, Richard, 2008. "Long-term changes in labor supply and taxes: Evidence from OECD countries, 1956-2004," Journal of Monetary Economics, Elsevier, vol. 55(8), pages 1353-1362, November.
  3. Mendoza, Enrique G. & Razin, Assaf & Tesar, Linda L., 1994. "Effective tax rates in macroeconomics: Cross-country estimates of tax rates on factor incomes and consumption," Journal of Monetary Economics, Elsevier, vol. 34(3), pages 297-323, December.
  4. Rogerson, Richard & Wallenius, Johanna, 2009. "Micro and macro elasticities in a life cycle model with taxes," Journal of Economic Theory, Elsevier, vol. 144(6), pages 2277-2292, November.
  5. Douglas Gollin, 2002. "Getting Income Shares Right," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 458-474, April.
  6. Helmut Hofer & Reinhard Koman, 2006. "Social security and retirement incentives in Austria," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 33(5), pages 285-313, December.
  7. Çiçek, Deniz & Elgin, Ceyhun, 2011. "Not-quite-great depressions of Turkey: A quantitative analysis of economic growth over 1968–2004," Economic Modelling, Elsevier, vol. 28(6), pages 2691-2700.
  8. Juan Carlos Conesa & Timothy J. Kehoe & Kim J. Ruhl, 2007. "Modeling great depressions: the depression in Finland in the 1990s," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Nov, pages 16-44.
  9. Timothy J. Kehoe & Edward C. Prescott, 2002. "Great Depressions of the Twentieth Century," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(1), pages 1-18, January.
  10. Timothy J. Kehoe & Edward C. Prescott(), 2007. "Great depressions of the twentieth century," Monograph, Federal Reserve Bank of Minneapolis, number 2007gdott.
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Cited by:

  1. Gary D. Hansen & Lee E. Ohanian, 2016. "Neoclassical Models in Macroeconomics," NBER Working Papers 22122, National Bureau of Economic Research, Inc.

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