z-logo
Premium
SOCIAL SECURITY AND LABOR SUPPLY INCENTIVES
Author(s) -
H. GORDON ROGER
Publication year - 1983
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.1983.tb00757.x
Subject(s) - earnings , economics , labour economics , social security , incentive , subsidy , payroll , net income , tax deduction , payroll tax , state income tax , business , gross income , tax reform , public economics , finance , microeconomics , market economy , accounting
Many provisions of the Social Security program distort an individual's labor supply incentives. In particular, the payroll tax, the earnings test, the offsetting actuarial adjustment, and the dependence of the size of future benefits on the level of current earnings all affect the net return to extra work. The purpose of this paper is to estimate the size of the net tax rate on labor income in a variety of circumstances, taking into account all these provisions, as well as the personal income tax. We find that the Social Security Program on net in the past has provided a large subsidy to labor supply, which for many people effectively offset the personal income tax. This subsidy rate, however, has been declining steadily over time

This content is not available in your region!

Continue researching here.

Having issues? You can contact us here