Carl Gergs

@cgergs.bsky.social

Economics PhD candidate @ University College London | Labor and Public Economics https://carlgergs.com

Hello #EconSky! 📢Excited to share my #JMP 📢 It provides a missing piece to understand how people react to income taxation. Tldr: By changing tax pre-payments governments can - with almost no costs - increase perceived work incentives of secondary earners and reduce the gender gap. Thread below👇🧵

To collect income taxes, almost all countries require employers to withhold monthly tax prepayments which are then fully credited against the final income tax liabilities of their employees. Despite being a fundamental component of income taxation systems worldwide, the impact of these withholding taxes on labor supply is poorly understood. We investigate their importance in the context of married couples in Germany where the withholding tax liability can be redistributed between spouses. We exploit a reform that reduced the withholding tax for some married women more than for others, while inducing no differences in income taxes. Using administrative data for the full population of German taxpayers, we estimate an elasticity of labor income with respect to the withholding tax eight years after the reform of 0.14. Additional evidence from a self-conducted survey suggests imperfect understanding of the tax system and limited pooling of resources within the household as the main mechanisms. As the majority of couples shift parts of the withholding tax liability from the husband to the wife, our results suggest that the increased withholding tax liability of married women contributes to their low labor supply. This highlights the need for governments to be aware of the distortion of labor supply incentives when the design of withholding taxes does not match actual income tax incentives.

#econjmp How do less affluent students respond to student finance induced increases in cost? 🎓Move to full loan policy: ⬇️ enrolment rates of eligible pupils ⚙️Effect driven by ⬆️ costs but also heightened concerns with debt 💰 ⚠️Overall: ⬇️teacher supply + narrowed access to university #econjobmarket

Carl Gergs@cgergs.bsky.social · 2y ago

Hello #EconSky 👋 excited to share my JMP! ❓What are the impacts of offering student finance as a grant or a loan? In the paper, I... 🎓 Study individual university enrolment, subject choice & career motivations ❗️Explore aggregate outcomes e.g. access to university & the occupational structure 🧵👇

Hello #EconSky 👋 excited to share my JMP! ❓What are the impacts of offering student finance as a grant or a loan? In the paper, I... 🎓 Study individual university enrolment, subject choice & career motivations ❗️Explore aggregate outcomes e.g. access to university & the occupational structure 🧵👇

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