Forecasting the Effects of a Negative Income Tax Program

ILR Review ◽  
1982 ◽  
Vol 35 (2) ◽  
pp. 221-234 ◽  
Author(s):  
Terry R. Johnson ◽  
John H. Pencavel
Keyword(s):  
Labor Supply ◽  
Income Tax ◽  
Single Women ◽  
Married Women ◽  
Negative Income ◽  
Married Men ◽  
Supply Functions ◽  
Hours Of Work ◽  
The Hours ◽  
Negative Income Tax

This paper outlines a scheme that forecasts the change in net earnings or in hours worked that results from the introduction of a negative income tax (NIT) program. The authors illustrate this scheme by estimating labor supply functions for married men, married women, and single women who participated in the Seattle-Denver Income Maintenance Experiments. These functions are then used to simulate the effects of several NIT programs. The findings suggest that changes in the wage rate of an individual covered by an NIT program result in important changes in the hours of work of the individual's spouse.

The Labor-Supply Effects and Costs of Alternative Negative Income Tax Programs

1978 ◽  
Vol 13 (1) ◽  
pp. 3 ◽  
Author(s):  
Michael C. Keeley ◽  
Philip K. Robins ◽  
Robert G. Spiegelman ◽  
Richard W. West
Keyword(s):  
Labor Supply ◽  
Income Tax ◽  
Negative Income ◽  
Negative Income Tax

Income Tax, Wage Tax, and Optimal Tax

1976 ◽  
Vol 4 (1) ◽  
pp. 3-15
Author(s):  
Eitan Berglas
Keyword(s):  
Labor Supply ◽  
Income Tax ◽  
High Income ◽  
Tax System ◽  
Wage Subsidies ◽  
Optimal Tax ◽  
Negative Income ◽  
Aggregation Problem ◽  
Wage Tax ◽  
Negative Income Tax

Recent studies find wage subsidies (WS) to be superior to negative income tax (NIT). However, these studies suffer from a serious aggregation problem. A model is suggested in which these aggregation problems are avoided. In this model there exists a WS schedule that increases labor supply compared with an equally costly NIT. However, the WS may be Pareto inferior. Furthermore, for high income workers given any income tax system it is always possible to find a wage tax system which both is Pareto superior and increases labor supply. The merits of the model and its implications for other optimal income tax studies are critically discussed.

The Association of Marriage and MBA Earnings

1993 ◽  
Vol 72 (3) ◽  
pp. 955-964 ◽  
Author(s):  
Thomas W. Harrell
Keyword(s):  
Job Satisfaction ◽  
Single Women ◽  
Emotional Reaction ◽  
Married Women ◽  
General Manager ◽  
Married Men ◽  
Hours Of Work ◽  
Stable Employment ◽  
Work Stability ◽  
Single Men

Sex differences in MBA careers were investigated to test three hypotheses: (1) men will advance in management more than women, (2) women will show more emotional reaction to career stress than men, (3) single women will progress more equally to single men than will be true for married women compared to married men. All three of the hypotheses were supported. Men earned more. In 1990 Kazal-Thresher found starting sex segregation by industry and occupation to explain some differences in earnings. Men worked longer hours, had more stable employment, achieved a general manager position more frequently, and had higher job satisfaction than women. Women, especially married women, expressed more frustration about careers than did men. Single women were not significantly different from single men in earnings, hours of work, stability of employment, and job satisfaction. Single women did not achieve a position as general manager as frequently as did single men.

scholarly journals Are There Treatment Duration Differences in the Seattle and Denver Income Maintenance Experiments?

2007 ◽  
Vol 7 (1) ◽  
Author(s):  
Melvin Stephens
Keyword(s):  
Labor Supply ◽  
Income Tax ◽  
Job Training ◽  
Estimated Parameters ◽  
Negative Income ◽  
Income Maintenance ◽  
Supply Model ◽  
Standard Life ◽  
Negative Income Tax ◽  
And Control

Abstract This paper re-examines the labor supply responses in the Seattle and Denver Income Maintenance Experiments (SIME/DIME). Specifically, the original experimental results show a significantly larger labor supply response for men and women from dual-headed households in the five-year Negative Income Tax (NIT) treatment relative to those in the three-year NIT treatment. Although typically thought of only as an NIT experiment, the SIME/DIME also included a job training experiment that enrolled roughly 60 percent of households, including both NIT treatment and control households. The original empirical specification imposed strong assumptions on the treatment response to the job training experiment in order to increase the precision of the estimated parameters. Once these assumptions are relaxed, the labor supply differences between men in the three- and five-year NIT treatments fall by over 50 percent in magnitude and become statistically insignificant. The analogous differences for women are almost entirely explained by these specification changes. Whereas the original findings of the SIME/DIME were inconsistent with the standard life-cycle labor supply model, the results of the re-analysis are mostly consistent with the model.

scholarly journals Is the EITC as Good as an NIT? Conditional Cash Transfers and Tax Incidence

2010 ◽  
Vol 2 (1) ◽  
pp. 177-208 ◽  
Author(s):  
Jesse Rothstein
Keyword(s):  
Labor Supply ◽  
Single Mothers ◽  
Low Income ◽  
Income Tax ◽  
Cash Transfers ◽  
Conditional Cash Transfers ◽  
Tax Incidence ◽  
Negative Income ◽  
Negative Income Tax

The EITC is intended to encourage work. But EITC-induced increases in labor supply may drive wages down. I simulate the economic incidence of the EITC. In each scenario that I consider, a large portion of low-income single mothers' EITC payments is captured by employers through reduced wages. Workers who are EITC ineligible also see wage declines. By contrast, a traditional Negative Income Tax (NIT) discourages work, and so induces large transfers from employers to their workers. With my preferred parameters, $1 in EITC spending increases after-tax incomes by $0.73, while $1 spent on the NIT yields $1.39. (JEL H22, H23, H24, H31, J22)

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