Effect of the Flat Tax Reform on Labour Supply Elasticity at the Intensive and Extensive Margins: Evidence from the Czech Republic
|Author:||Mgr. Ján Tomo|
|Year:||2015 - summer|
|Leaders:|| Mgr. Barbara Pertold-Gebicka M.A., Ph.D.
|Work type:|| Finance, Financial Markets and Banking
|Awards and prizes:|
|Abstract:||The thesis deals with the estimation of labour supply responses to the personal
income tax reform in the Czech Republic adopted in 2008 by applying quasi
experimental design known as “difference-in-differences”. By exploiting the
different change in the effective tax rates for various population subgroups as
a natural experiment and using microdata from European Labour Force Survey
we constructed the treatment and control groups according to the highest
attained level of education serving as a proxy for an income range that assigns
an individual to the particular tax bracket before and after policy change.
Analysing one-person households we found significant negative effect on the
labour force participation and significant positive effect on the hours work of
the treated by comparing these outcomes for the treatment and control groups
in the baseline and follow up periods before and after the reform.