Labor Supply Responses to Learning the Tax and Benefit Schedule

• 成果类型: Article
• 署名作者: Kostol, Andreas R.; Myhre, Andreas S.
• 署名单位: Arizona State University; Arizona State University-Tempe; Statistics Norway; IZA Institute Labor Economics
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20201877
• 发表日期: 2021
• 页码: 3733-3766
• 关键词: DISABILITY INSURANCE RECIPIENTS; optimization frictions; financial incentives; taxable income; elasticities; SALIENCE; preferences; INFORMATION; earnings; micro

摘要

Despite the implications for policy, empirical evidence on the relative importance of factors that shape labor supply responses is missing. This paper helps fill this gap and quantifies the role of information frictions versus other frictions by combining notches in the Norwegian welfare system and quasi-experimental variation in access to information about the slope and location of kinks. While we estimate a frictionless elasticity of 0.3, overall frictions attenuate this elasticity by about 70 percent. We find the information letter increased the earnings elasticity from 0.06 to 0.15, implying that information frictions account for at least 30 percent of total attenuation.