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This paper proposes a new method for estimating family labor supply in the presence of taxes. This method accounts for continuous hours choices, measurement error, unobserved heterogeneity in tastes for work, the nonlinear form of the tax code, and fixed costs of work in one comprehensive specification. Estimated on data from the 2001 PSID, the resulting elasticities for married males are consistent with those found elsewhere in the literature but female wage elasticities are substantially smaller than those found in most of the literature. Simulations of recent tax acts predict small effects on the labor supply of married couples. (Contains 8 tables, 4 figures and 48 footnotes.)

This paper estimates the elasticity of taxable income to the net-of-tax share using a panel of tax returns that follows a random sample of taxpayers from 1999 to 2005, spanning the EGTRRA 2001 and JGTRRA 2003 tax changes. Results suggest that the elasticity of taxable income to the current year's net-of-tax share lies between 0.3 and 0.4 overall, and that the elasticity of a broader measure of income falls between 0.1 and 0.2 overall, with substantially higher elasticities for taxpayers reporting income in excess of $500,000. (Contains 6 tables and 24 footnotes.)

This paper demonstrates the extent to which married women's labor supply elasticities have changed over the past quarter century. Estimates from March Current Population Survey data suggest that these elasticities have decreased substantially, by 60 percent for the hours wage elasticity (from 0.36 to 0.14), 70 percent for the hours income elasticity (from -0.053 to -0.015), 95 percent for the participation wage elasticity (from 0.66 to 0.03), and 60 percent for the participation income elasticity (from -0.13 to -0.05). Changing demographic characteristics explain little of the drop in these elasticities, suggesting that preferences toward work have changed across birth cohorts. (Contains 28 footnotes, 13 figures, and 3 tables.) [This article was produced by University of Wisconsin Press, Madison, WI.]

This article examines the determinants of and benefits from saving for retirement in tax-preferred accounts by permanent and transitory income levels. We find that higher incomes (both permanent and transitory) are associated with a greater probability to contribute and larger contributions. We also find that tax benefits for retirement savings increase strongly with income, although the increase is slightly smaller when taxpayers are ranked by their permanent (rather than current) income. In addition, we find that a large portion of the benefits from the Saver's Credit go to taxpayers who would not be eligible based on their permanent income. Finally, we find that recent tax changes (including the introduction of the Saver's Credit) significantly increased contributions among low-income households, although the effect was centered among those with only transitorily low income. (JEL H24, H3 1, E21), I. INTRODUCTION The income tax code in the United States contains numerous provisions that provide tax benefits for savings in qualified retirement accounts, and the use of these accounts is [...]

This paper tests whether the effect of tax-based subsidies for self-employed health insurance on the level of self-employment differs with the type of non-group insurance regulatory regime at the state level. Using a panel of tax returns from 1999 to 2004, we estimate fixed effects instrumental variable regressions for the probability of being self-employed, allowing the effect of the after-tax price of self-employed health insurance to differ by regulatory regime. Our results suggest that states with community rating and guaranteed issue regulations had significantly smaller increases in the fraction of taxpayers reporting some amount of self-employment income as a result of a decrease in the after-tax price of self-employed health insurance. However, there is suggestive evidence that heavily regulated states experienced a larger increase in exclusive self-employment, particularly among older taxpayers. (JEL J24, H24, 118), I. INTRODUCTION The rising cost of health care, the large number of uninsured (estimated to be 50 million in 2009), and the perception that the individual health insurance market is [...]

The reason for not handling work costs in labor supply estimation could be its complexity. The results of not considering workcosts in the budget and time constraints of labor supply model are stated. However tax changes on labor supply and measures of loss burden are not affected by the use of work costs.

A new family labor supply estimation approach that allows for estimating a continuous hours model in the presence of taxes is presented. Estimated wage elasticities of women workers were found to be smaller than previously observed. The use of the new method in estimating other models of family labor supply is also explained.

To contribute to a retirement plan (barring an increase in income), an individual must either reduce consumption or increase debt. Using data from the 2004 wave of the Survey of Income and Program Participation, we examine the extent to which contributing to 401(k)-type accounts leads to an increase in short-term financial difficulties, particularly among low-income individuals. After instrumenting for plan take-up, we find that contributing to a 401(k) plan appears to have a small positive impact on the presence of any material hardship and debt holding among the lowest income quintiles, though that effect diminishes further up the income distribution. [ABSTRACT FROM PUBLISHER]