Taxes and Labor Supply: Portugal, Europe, and the United States (Conference Version)
Andre C. Silva
Universidade Nova de Lisboa
November 26, 2005
FEUNL Working Paper Series No. 560
I relate hours worked with taxes on consumption and labor. I propose a model and compare its predictions for Portugal, France, Spain, United Kingdom and United States. Hours per worker in Portugal decreased from 35.1 in 1986 to 32.6 in 2001. With only the parameters and the taxes for Portugal, the model predicts the hours worked in 2001 with an error of only 12 minutes from the actual hours. Across countries, most predictions differ from the data by one hour or less. The model is able to explain the trend in hours with only the changes in taxes.
Number of Pages in PDF File: 26
Keywords: labor supply, consumption tax, labor income taxworking papers series
Date posted: January 26, 2012
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