Heterogeneity in Labour Supply Responses: Evidence from a Major Tax Reform

28 Pages Posted: 6 Sep 2017

See all articles by Mauro Mastrogiacomo

Mauro Mastrogiacomo

VU University Amsterdam

Nicole Bosch

CPB Netherlands Bureau of Economic Policy Analysis

Miriam D. A. C. Gielen

Government of the Netherlands - Ministry of Social Affairs and Employment

Egbert Jongen

CPB Netherlands Bureau of Economic Policy Analysis

Date Written: October 2017

Abstract

We use a large and rich administrative household panel data set to estimate labour supply responses for a large number of subgroups in the Netherlands. The identification of the parameters benefits from a major tax reform in the data period. We uncover large differences in behavioural responses. In particular, we find differences in labour supply responses between households with and without children that are much bigger than suggested by previous studies that had to pool these household types in the estimation of preferences. An efficient tax‐benefit system should take the substantial heterogeneity in behavioural responses into account.

Suggested Citation

Mastrogiacomo, Mauro and Bosch, Nicole and Gielen, Miriam D. A. C. and Jongen, Egbert, Heterogeneity in Labour Supply Responses: Evidence from a Major Tax Reform (October 2017). Oxford Bulletin of Economics and Statistics, Vol. 79, Issue 5, pp. 769-796, 2017, Available at SSRN: https://ssrn.com/abstract=3032799 or http://dx.doi.org/10.1111/obes.12168

Mauro Mastrogiacomo (Contact Author)

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

Nicole Bosch

CPB Netherlands Bureau of Economic Policy Analysis ( email )

P.O. Box 80510
2508 GM The Hague, 2585 JR
Netherlands

Miriam D. A. C. Gielen

Government of the Netherlands - Ministry of Social Affairs and Employment ( email )

Den Haag
Netherlands

Egbert Jongen

CPB Netherlands Bureau of Economic Policy Analysis ( email )

P.O. Box 80510
2508 GM The Hague, 2585 JR
Netherlands

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