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Title: Essays on income taxation and labor market outcomes
Author: Sumiya, Kazuhiko
ISNI:       0000 0004 8500 216X
Awarding Body: Royal Holloway, University of London
Current Institution: Royal Holloway, University of London
Date of Award: 2018
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This thesis addresses questions regarding the effect of income taxation on labor market outcomes. Chapter 1 asks "Do income taxes create accumulating effects over time on pre-tax hourly wages by distorting on-the-job human capital accumulation?" This chapter presents micro evidence by exploiting Danish administrative data and a tax reform. After nonparametrically controlling for pre-reform income and covariates, I provide graphical evidence and difference-in-differences estimates regarding the accumulating effects. I find suggestive evidence that learning-by-doing is the underlying channel. However, I do not find significant effects of taxes on participation in on-the-job training courses. To understand welfare implications, this chapter next constructs a labor supply model with endogenous wage dynamics as a conceptual framework. Guided by the model, the elasticity estimates imply that the wage response has a larger impact on welfare than the hour response and that both responses create accumulating effects on welfare. In Chapter 2, we study the impact of labor income taxation on workers' job search behavior and the implications it has for the equilibrium allocation of heterogenous workers across heterogenous firms. The analysis is conducted within a complete markets equilibrium on-the-job search model with two-sided heterogeneity, endogenous job search effort and hiring intensity, equilibrium wage formation, and firm entry and exit. By appropriating part of the gain from finding a better paid job, income taxation reduces the return to job search effort, and distorts workers' job search effort, which, in turn, distorts the equilibrium allocation of labor. The model is estimated on Danish matched employeremployee data, and is used to evaluate a series of tax reforms in Denmark in the 1990s and 2000s, to provide new insights into the elasticity of taxable labor income, and to identify a Pareto-optimal income tax reform.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available