How Does Taxation Affect Hours Worked in EU New Member States?
IMF Working Papers, June 17, 2019
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Bibliographic details
- Authors: Agustin Velasquez, Svetlana Vtyurina
- Published: June 17, 2019
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781498315708.001
Summary and Research Question
- Investigates the role played by taxation in explaining differences in hours worked across EU New Member States.
- Extends a standard growth model with novel data on consumption and labor taxes.
- Assesses the evolution of trends in hours worked over the 1995-2017 period.
- Authors: Agustin Velasquez, Svetlana Vtyurina.
- Publication date: June 17, 2019.
- Series: Working Paper No. 2019/130.
Data and Methods
- Extends a standard growth model to incorporate tax rates.
- Uses novel data on consumption taxes and labor taxes.
- Period covered: 1995-2017.
- Pages: 35.
Key Findings and Quantitative Results
- Inclusion of tax rates in the model significantly improves the tracking of hours worked.
- Estimates elasticity of hours (and its different margins) to quantify the deadweight loss introduced by consumption and labor taxes.
- Finds that consumption and labor taxes explain a large share of labor supply differences across EU New Member States.
- Concludes that potential gains from policy actions are noteworthy.
Policy Implications and Recommendations
- Tax policy (consumption and labor taxes) materially affects labor supply and hours worked.
- Reforms to consumption and labor taxation could yield noteworthy gains in labor supply and labor market outcomes.
Publication and Identifiers
- Publication title: How Does Taxation Affect Hours Worked in EU New Member States?
- Publication type: IMF Working Papers.
- Volume: 2019.
- Issue: 130.
- DOI: https://doi.org/10.5089/9781498315708.001
- Stock No: WPIEA2019130
- ISBN: 9781498315708
- ISSN: 1018-5941
Source: IMF Working Paper by Agustin Velasquez and Svetlana Vtyurina, June 17, 2019.
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- Working Paper