A Structural Approach to Estimating the Effect of Taxation on the Labor Market Dynamics of Older Workers
27 Pages Posted: 7 Apr 2009
We estimate a dynamic structural life-cycle model of employment, non-employment and retirement that includes endogenous accumulation of human capital and intertemporal non-separabilities in preferences. Additionally, the model accounts for the effect of the tax and transfer system on work incentives. The structural parameter estimates are used to evaluate the effects of a tax reform targeted at low income individuals on employment behavior and retirement decisions.
Keywords: life-cycle labor supply, income taxation
JEL Classification: C23, C25, J22, J64
Suggested Citation: Suggested Citation