TY - JOUR
AU1 - Okada, Masayuki
AB - This paper quantitatively derives the welfare-improving earnings test within an optimal income tax framework. I construct a life cycle model of labor supply and savings to compute social welfare. The preference parameters are estimated by the method of simulated moments using Japanese data. I find that social welfare under the current earnings test with large changes of marginal tax rates at thresholds is substantially lower than social welfare under the earnings test with a linear tax rate. In addition, an earnings test with negative marginal tax rates will increase social welfare more than a system without negative marginal tax rates.
TI - The optimal earnings test and retirement behavior
JF - International Tax and Public Finance
DO - 10.1007/s10797-022-09734-0
DA - 2023-08-01
UR - https://www.deepdyve.com/lp/springer-journals/the-optimal-earnings-test-and-retirement-behavior-ls140rGtdp
SP - 1036
EP - 1068
VL - 30
IS - 4
DP - DeepDyve
ER -