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THE EVOLUTION OF TAXES AND HOURS WORKED IN AUSTRIA, 1970–2005

Published online by Cambridge University Press:  22 May 2014

John T. Dalton
John T. Dalton*
Affiliation:
Wake Forest University
*
Address correspondence to: John T. Dalton, Department of Economics, Kirby Hall, Wake Forest University, Box 7505, Winston-Salem, NC 27109, USA; e-mail: daltonjt@wfu.edu.
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Abstract

Aggregate hours worked per working-age person decreased in Austria by 25% from 1970 to 2005. During the same time period, taxes increased, particularly the effective marginal tax rate on labor income. Using a standard general equilibrium growth model with taxes, I quantitatively assess the role played by the evolution of taxes in the evolution of hours worked in Austria. The model accounts for 76% of the observed decrease in hours worked per working-age person. My results are in line with other studies, which find taxes play an important role in explaining aggregate hours worked.

Keywords

TaxesLabor SupplyGrowth AccountingDynamic General Equilibrium

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Type
Articles
Information
Macroeconomic Dynamics , Volume 19 , Issue 8 , December 2015 , pp. 1800 - 1815
Copyright
Copyright © Cambridge University Press 2014 

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