scholarly journals Income Taxes, Compensating Differentials, and Occupational Choice: How Taxes Distort the Wage-Amenity Decision

2011 ◽  
Author(s):  
David Powell ◽  
Hui Shan
Keyword(s):  
Occupational Choice ◽  
Income Taxes ◽  
Compensating Differentials

scholarly journals Income Taxes, Compensating Differentials, and Occupational Choice: How Taxes Distort the Wage-Amenity Decision

2012 ◽  
Vol 4 (1) ◽  
pp. 224-247 ◽  
Author(s):  
David Powell ◽  
Hui Shan
Keyword(s):  
Occupational Choice ◽  
Income Taxes ◽  
Compensating Differentials ◽  
Tax Rates ◽  
Occupational Choices ◽  
Tax Rate ◽  
Welfare Impacts ◽  
Percent Increase

The link between taxes and occupational choices is central for understanding the welfare impacts of income taxes. Just as taxes distort the labor-leisure decision, they may also distort the wage-amenity decision. Yet, there have been few studies on the full response along this margin. When tax rates increase, workers favor jobs with lower wages and more amenities. We introduce a two-step methodology which uses compensating differentials to characterize the tax elasticity of occupational choice. We estimate a significant compensated elasticity of 0.03, implying that a 10 percent increase in the net-of-tax rate causes workers to change to a 0.3 percent higher wage job. (JEL H24, H31, J22, J24, J31)

scholarly journals Redistributive Taxation in the Roy Model*

2013 ◽  
Vol 128 (2) ◽  
pp. 623-668 ◽  
Author(s):  
Casey Rothschild ◽  
Florian Scheuer
Keyword(s):  
Income Tax ◽  
Occupational Choice ◽  
Pareto Frontier ◽  
Income Taxes ◽  
Natural Conditions ◽  
Sector Model ◽  
Self Selection ◽  
Redistributive Taxation ◽  
Wage Distributions ◽  
The Government

Abstract We consider optimal redistribution in a model where individuals can self-select into one of several possible sectors based on heterogeneity in a multidimensional skill vector. We first show that when the government does not observe the sectoral choice or underlying skills of its citizens, the constrained Pareto frontier can be implemented with a single nonlinear income tax. We then characterize this optimal tax schedule. If sectoral inputs are complements, a many-sector model with self-selection leads to optimal income taxes that are less progressive than the corresponding taxes in a standard single-sector model under natural conditions. However, they are more progressive than in canonical multisector economies with discrete types and without occupational choice or overlapping sectoral wage distributions.

Application of Special Psycho-Physiological Technologies in the System of Occupational Choice of Aviation Specialists in Ukraine

2007 ◽  
Vol 3 (5) ◽  
pp. 36-52
Author(s):  
V.P. Babak ◽  
◽  
O.R. Malkhazov ◽  
V.P. Kharchenko ◽  
◽  
...  
Keyword(s):  
Occupational Choice
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