One of the key issues in understanding how tax policies affect labour supply is intrahousehold allocation of time and consumption. This is in particular the case of welfare benefits aimed at providing a safety net against poverty and work incentives at the same time, such as the Working Family Tax Credit programme in the UK (and the Earned Income Tax Credit in the US). The models used to addres...

___________________________________________________________________ There have been tremendous advances in macroeconomics, following the introduction of labor supply into the field. Today it is widely acknowledged that labor supply matters for many key economic issues, particularly for business cycles and tax policy analysis. However, the extent to which labor supply matters for such questions ...

Loss Aversion and Labor Supply In many occupations workers’ labor supply choices are constrained by institutional rules regulating labor time and effort provision. This renders explicit tests of the neoclassical theory of labor supply difficult. Here we present evidence from studies examining labor supply responses in “neoclassical environments” in which workers are free to choose when and how ...

The net effects of switching from consumption taxation to inflation taxation on resource allocation and welfare crucially depend on production externalities. With elastic labor supply, raising inflation taxation decreases leisure, but increases the levels of real consumption, capital, and output. Moreover, this tax switch has two opposing effects on the level of real money balances: A positive ...

This paper deals with the effects of implementing a basic income on the labor supply side. The German welfare as well as tax and social contributions system are investigated. The results clarify that the abolishment of the so-called unemployment trap due to a basic income policy is a decisive advantage of this approach. In order to demonstrate possible labor supply side reactions to a basic inc...

This paper quantitatively tests how much of the post-WWII evolution in employment and average wages by gender can be explained by a model where changing labor demand requirements are the driving forces. I argue that a big fraction of the original female employment and wage gaps in mid-century, and the subsequent shrinking of both gaps, are explained by labor reallocation from brawn-intensive to...

This study investigates the effects of changes in various determinants of labor supply on the dramatic changes from the older (the 1950s and earlier) cohorts to the younger (the 1960s and later) cohorts in life-cycle labor supply behavior, and ultimately provides a model-based quantitative explanation of the recent decline in the aggregate labor supply of married women. On the basis of the Curr...

In this paper we investigate the importance of labor market institutions such as unemployment insurance, unions, …ring regulation and minimum wages for the evolution of male wage inequality across countries. We derive a simple log-linear equation of the wage di¤erential as a function of the institutional parameters, total factor productivity, …nal good prices and relative skill supply. Our esti...

Using data from four waves of the National Health and Nutrition Examination Survey, we examine the difference between individuals with diagnosed and undiagnosed cases of type 2 diabetes and their labor supply decisions. We show that a diagnosis of type 2 diabetes is significantly associated with a reduction in both male and female employment probability by 11 and 19 percentage points, respectiv...