This paper shows the results of an experiment aiming to test the effect of taxation on the labour supply. Differently from previous experiments [Le´vy-Garboua, L., Masclet, D., & Montmarquette, C. (2005). Fiscalite´ et offre de travail: Une e´tude experimentale. CIRANO, Montre´al, working paper 2005, s-23; Sillamaa, M.A., (1999). Taxpayer behavior in response to taxation: Comment and new experimental evidence. Journal of Accounting and Public Policy, 18; Sutter, M., & Weck-Hannemann, H. (2003). Taxation and the veil of ignorance – A real effort experiment of the Laffer curve. Public Choice, 115; Swenson, C.W., (1988). Taxpayer behavior in response to taxation. An experimental analysis. Journal of Accounting and Public Policy, 7], in our experiment the revenue of taxation is not left unaccounted for but employed – more realistically – to finance public goods and insurance against risk (i.e., a Welfare State). The result is a slight increase in the labour supply. This behaviour is the opposite of what was shown in the experiments quoted above, but is consistent with a theoretical model suggested by Bird in 2001 [Bird, E.J., (2001). Does the welfare state induce risktaking? Journal of Public Economics, 80]. The use of the tax revenue appears to be relevant for subjects’ reaction to tax levies.

Ortona, G., Ottone, S., Ponzano, F., Scacciati, F. (2008). Labour supply in presence of taxation financing public services. An experimental approach. JOURNAL OF ECONOMIC PSYCHOLOGY, 29(5), 619-631 [10.1016/j.joep.2007.07.006].

Labour supply in presence of taxation financing public services. An experimental approach

OTTONE, STEFANIA;
2008

Abstract

This paper shows the results of an experiment aiming to test the effect of taxation on the labour supply. Differently from previous experiments [Le´vy-Garboua, L., Masclet, D., & Montmarquette, C. (2005). Fiscalite´ et offre de travail: Une e´tude experimentale. CIRANO, Montre´al, working paper 2005, s-23; Sillamaa, M.A., (1999). Taxpayer behavior in response to taxation: Comment and new experimental evidence. Journal of Accounting and Public Policy, 18; Sutter, M., & Weck-Hannemann, H. (2003). Taxation and the veil of ignorance – A real effort experiment of the Laffer curve. Public Choice, 115; Swenson, C.W., (1988). Taxpayer behavior in response to taxation. An experimental analysis. Journal of Accounting and Public Policy, 7], in our experiment the revenue of taxation is not left unaccounted for but employed – more realistically – to finance public goods and insurance against risk (i.e., a Welfare State). The result is a slight increase in the labour supply. This behaviour is the opposite of what was shown in the experiments quoted above, but is consistent with a theoretical model suggested by Bird in 2001 [Bird, E.J., (2001). Does the welfare state induce risktaking? Journal of Public Economics, 80]. The use of the tax revenue appears to be relevant for subjects’ reaction to tax levies.
Articolo in rivista - Articolo scientifico
taxation; labour supply; real effort experiment
English
2008
29
5
619
631
none
Ortona, G., Ottone, S., Ponzano, F., Scacciati, F. (2008). Labour supply in presence of taxation financing public services. An experimental approach. JOURNAL OF ECONOMIC PSYCHOLOGY, 29(5), 619-631 [10.1016/j.joep.2007.07.006].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/5440
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