TY - JOUR A1 - Eydam, Ulrich A1 - Qualo, Hannes T1 - Income inequality and taxes BT - an empirical assessment JF - Applied economics letters N2 - Economic literature offers several distinct explanations for the raising income inequality observed in several countries. In the debate about the causes of inequality a growing strand of research focuses on the effects of taxation on income inequality. We contribute to this literature by providing a systematic empirical account of the relationship between income inequality and personal income taxation (PIT) for a set of countries over the period 1981–2005. In order to take alternative explanations into account and to isolate the effects of tax progressivity, we include a wide range of control variables. We address potential reverse causality between inequality and PIT by using the variation in tax schedules of neighbouring countries. Our results confirm a statistically significant negative association between the progressivity of PIT and income inequality. Overall, we find that especially the average and the marginal tax rate have the potential to reduce income inequality. This finding is qualitatively robust across various different empirical specifications. KW - income inequality KW - tax progressivity KW - personal income taxation KW - instrumental variables Y1 - 2023 U6 - https://doi.org/10.1080/13504851.2023.2208328 SN - 1350-4851 SN - 1466-4291 SP - 1 EP - 8 PB - Routledge CY - Abingdon ER - TY - JOUR A1 - Caliendo, Marco A1 - Tübbicke, Stefan T1 - New evidence on long-term effects of start-up subsidies BT - matching estimates and their robustness JF - Empirical economics N2 - The German start-up subsidy (SUS) program for the unemployed has recently undergone a major makeover, altering its institutional setup, adding an additional layer of selection and leading to ambiguous predictions of the program's effectiveness. Using propensity score matching (PSM) as our main empirical approach, we provide estimates of long-term effects of the post-reform subsidy on individual employment prospects and labor market earnings up to 40 months after entering the program. Our results suggest large and persistent long-term effects of the subsidy on employment probabilities and net earned income. These effects are larger than what was estimated for the pre-reform program. Extensive sensitivity analyses within the standard PSM framework reveal that the results are robust to different choices regarding the implementation of the weighting procedure and also with respect to deviations from the conditional independence assumption. As a further assessment of the results' sensitivity, we go beyond the standard selection-on-observables approach and employ an instrumental variable setup using regional variation in the likelihood of receiving treatment. Here, we exploit the fact that the reform increased the discretionary power of local employment agencies in allocating active labor market policy funds, allowing us to obtain a measure of local preferences for SUS as the program of choice. The results based on this approach give rise to similar estimates. Thus, our results indicating that SUS are still an effective active labor market program after the reform do not appear to be driven by "hidden bias." KW - start-up subsidies KW - policy reform KW - matching KW - instrumental variables Y1 - 2019 U6 - https://doi.org/10.1007/s00181-019-01701-9 SN - 0377-7332 SN - 1435-8921 VL - 59 IS - 4 SP - 1605 EP - 1631 PB - Physica-Verlag CY - Heidelberg ER - TY - RPRT A1 - Matthewes, Sönke Hendrik A1 - Ventura, Guglielmo T1 - On Track to Success? BT - Returns to Vocational Education Against Different Alternatives T2 - CEPA Discussion Papers N2 - Many countries consider expanding vocational curricula in secondary education to boost skills and labour market outcomes among non-university-bound students. However, critics fear this could divert other students from more profitable academic education. We study labour market returns to vocational education in England, where until recently students chose between a vocational track, an academic track and quitting education at age 16. Identification is challenging because self-selection is strong and because students’ next-best alternatives are unknown. Against this back- drop, we leverage multiple instrumental variables to estimate margin-specific treatment effects, i.e., causal returns to vocational education for students at the margin with academic education and, separately, for students at the margin with quitting education. Identification comes from variation in distance to the nearest vocational provider conditional on distance to the nearest academic provider (and vice-versa), while controlling for granular student, school and neighbourhood characteristics. The analysis is based on population-wide administrative education data linked to tax records. We find that the vast majority of marginal vocational students are indifferent be- tween vocational and academic education. For them, vocational enrolment substantially decreases earnings at age 30. This earnings penalty grows with age and is due to wages, not employment. However, consistent with comparative advantage, the penalty is smaller for students with higher revealed preferences for the vocational track. For the few students at the margin with no further education, we find merely tentative evidence of increased employment and earnings from vocational enrolment. T3 - CEPA Discussion Papers - 58 KW - vocational education KW - returns to education KW - multi-valued treatment KW - instrumental variables Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-567253 SN - 2628-653X IS - 58 ER -