Evaluating the effect of tax deductions on training
Due to a tax law implemented in 1998, Dutch employers can claim an extra tax deduction when they train employees aged 40 years or older. This causes a discontinuity in a firm's cost of training an employee. We exploit this discontinuity to identify two effects: the effect of the tax deduction on training participation, and the effect of training participation on wages. We find that the training rate of workers just above 40 is about 15-20 percent higher than the training rate of workers just below 40. This difference cannot entirely be attributed to the stimulating effect of the tax deduction. Our estimates show that spill- over effects on workers younger than 40 are so substantial that the net effect of the age-dependent tax deduction is zero.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Harmon, Colm & Walker, Ian, 1995. "Estimates of the Economic Return to Schooling for the United Kingdom," American Economic Review, American Economic Association, vol. 85(5), pages 1278-86, December.
- Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-09, January.
- Pischke, J-S, 1996.
"Continuous Training in Germany,"
96-28, Massachusetts Institute of Technology (MIT), Department of Economics.
- Pischke, Jörn-Steffen, 2000. "Continuous Training in Germany," IZA Discussion Papers 137, Institute for the Study of Labor (IZA).
- Pischke, Jörn-Steffen, 2000. "Continuous Training In Germany," CEPR Discussion Papers 2428, C.E.P.R. Discussion Papers.
- Jorn-Steffen Pischke, 1996. "Continuous Training in Germany," NBER Working Papers 5829, National Bureau of Economic Research, Inc.
- Anne B. Royalty, 1996. "The effects of job turnover on the training of men and women," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 49(3), pages 505-521, April.
- Booth, Alison L, 1993. "Private Sector Training and Graduate Earnings," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 164-70, February.
- Tomas Philipson, 1999.
"External Treatment Effects and Program Implementation Bias,"
9929, Harris School of Public Policy Studies, University of Chicago.
- Tomas J. Philipson, 2000. "External Treatment Effects and Program Implementation Bias," NBER Technical Working Papers 0250, National Bureau of Economic Research, Inc.
- Lynch, Lisa M, 1992. "Private-Sector Training and the Earnings of Young Workers," American Economic Review, American Economic Association, vol. 82(1), pages 299-312, March.
- repec:eme:rlepps:v:18:y:1999:i:1999:p:303-330 is not listed on IDEAS
- John Bishop, 1994. "The Impact of Previous Training on Productivity and Wages," NBER Chapters, in: Training and the Private Sector: International Comparisons, pages 161-200 National Bureau of Economic Research, Inc.
- Joshua Angrist & Victor Lavy, 2002.
"New Evidence on Classroom Computers and Pupil Learning,"
Royal Economic Society, vol. 112(482), pages 735-765, October.
- Angrist, Joshua & Lavy, Victor, 2001. "New Evidence on Classroom Computers and Pupil Learning," IZA Discussion Papers 362, Institute for the Study of Labor (IZA).
- Joshua Angrist & Victor Lavy, 1999. "New Evidence on Classroom Computers and Pupil Learning," NBER Working Papers 7424, National Bureau of Economic Research, Inc.
- Barron, John M & Black, Dan A & Loewenstein, Mark A, 1987. "Employer Size: The Implications for Search, Training, Capital Investment, Starting Wages, and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 5(1), pages 76-89, January.
- Barron, John M & Berger, Mark C & Black, Dan A, 1997. "How Well Do We Measure Training?," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 507-28, July.
- Joshua D. Angrist & Victor Lavy, 1999. "Using Maimonides' Rule To Estimate The Effect Of Class Size On Scholastic Achievement," The Quarterly Journal of Economics, MIT Press, vol. 114(2), pages 533-575, May.
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpla:0205001. 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: (EconWPA)
If references are entirely missing, you can add them using this form.