We study the elasticity of taxable labour income in the Netherlands. We use a large and rich data set, including both financial and demographic variables, for the period 1999–2005. The 2001 tax... Show moreWe study the elasticity of taxable labour income in the Netherlands. We use a large and rich data set, including both financial and demographic variables, for the period 1999–2005. The 2001 tax reform generates large exogenous variation in marginal tax rates at different segments of the income distribution. For all workers, we find an elasticity of 0.10 in the short run, 1 year after the reform, rising to 0.24 in the medium to longer run, 5 years after the reform. Furthermore, we find that the elasticity is higher for higher incomes and for women. Also, we find that the elasticity of taxable labour income is higher than the elasticity of (contractual) annual hours worked. Show less
Bosch, N.; Jongen, E.L.W.; Leenders, W.; Möhlmann, J. 2019
We study the behavioural responses to kinks and notches in the Dutch system of cash transfers, using data on the universe of Dutch households for the period 2007–2014. We typically do not find... Show moreWe study the behavioural responses to kinks and notches in the Dutch system of cash transfers, using data on the universe of Dutch households for the period 2007–2014. We typically do not find statistically significant evidence of bunching around kinks or notches, neither in income nor in wealth. This finding is robust across different household types and modes of employment. We consider potential mechanisms that can explain this apparent lack of bunching. Show less
