Flat Taxes and Labor Supply in Central and Eastern Europe
Abstract/Contents
- Abstract
- This study examines how flat taxes have affected labor supply in the Central and Eastern European countries where they have been adopted. I study a structural relationship among key variables, including tax rates and labor supply. According to the model, work incentives and labor supply increased with the adoption of the flat tax in Lithuania, Russia, Slovakia, Ukraine, Romania, and Georgia. In these countries, flat taxes reduced the marginal tax rate on income and thus increased incentives to work. In contrast, the model indicates that Estonia’s labor supply decreased because the flat tax actually increased the marginal tax rate. Latvia experienced no change in the marginal tax rate with the adoption of the flat tax. A surprising finding is that the marginal tax rates are in the range of 60% to 75% in six of the eight countries even after the adoption of flat tax reforms. Actual labor supply statistics suggest the model I use estimates labor supply well for five countries but does not explain all labor supply shifts in emerging economies.
Description
| Type of resource | text |
|---|---|
| Date created | May 2008 |
Creators/Contributors
| Author | Easterbrook, Kathleen F. |
|---|---|
| Primary advisor | Hall, Robert E. |
| Degree granting institution | Stanford University, Department of Economics |
Subjects
| Subject | Stanford Department of Economics |
|---|---|
| Genre | Thesis |
Bibliographic information
| Related item | |
|---|---|
| Location | https://purl.stanford.edu/ph329wm4397 |
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Preferred citation
- Preferred Citation
- Easterbrook, Kathleen F. (2008). Flat Taxes and Labor Supply in Central and Eastern Europe . Stanford Digital Repository. Available at: https://purl.stanford.edu/ph329wm4397
Collection
Stanford University, Department of Economics, Honors Theses
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