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ERIC Number: EJ999683
Record Type: Journal
Publication Date: 2012
Pages: 32
Abstractor: As Provided
Reference Count: 18
ISBN: N/A
ISSN: ISSN-0022-166X
Compensating Differentials and Income Taxes: Are the Wages of Dangerous Jobs More Responsive to Tax Changes than the Wages of Safe Jobs?
Powell, David
Journal of Human Resources, v47 n4 p1023-1054 Fall 2012
Income taxes distort the relationship between wages and nontaxable amenities. When the marginal tax rate increases, amenities become more valuable as the compensating differential for low-amenity jobs is taxed away. While there is evidence that the provision of amenities responds to taxes, the literature has ignored the consequences for job characteristics which cannot fully adjust. This paper compares the wage response of dangerous jobs to the wage response of safe jobs. When tax rates increase, we should see the pretax compensating differential for on-the-job risk increase. Empirically, I find large differences in the wage response of jobs based on their riskiness. (Contains 13 tables, 3 figures, and 6 footnotes.)
University of Wisconsin Press. 1930 Monroe Street, Madison, WI 53711-2059. Tel: 608-263-0668; Fax: 608-263-1173; e-mail: journals@uwpress.wisc.edu; Web site: http://www.wisc.edu/wisconsinpress/journals
Publication Type: Journal Articles; Reports - Evaluative
Education Level: Adult Education; Postsecondary Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Identifiers - Laws, Policies, & Programs: Tax Reform Act 1986