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

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