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DIW Discussion Papers 417 / 2004
The paper analyses the effect of class size, which stands proxy for school quality, on early career earnings. Using confidential district level information from the German Socio-Economic Panel (GSOEP), it is demonstrated that class size has no discernible effect on early career earnings. This finding is robust to changes in specification and the choice of sub-samples. The economic literature focused ...
2004| Hans J. Baumgartner
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DIW Discussion Papers 415 / 2004
This paper examines the impact of children on female wages in the UK using the National Child Development Study. Empirically this involves using an extension of the Roy model, which simultaneously corrects for the endogeneity of labour force participation and fertility. The wage differential between women without children and women with children is estimated to range between 19% and 22% not accounting ...
2004| Tarja K. Viitanen
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DIW Discussion Papers 412 / 2004
This study analyzes the effect of child care costs on the labor supply of mothers with preschool children in Germany using data from the German Socio-Economic Panel (2002). Child care costs are estimated on the basis of a sample selection model. A structural household utility model, which is embedded in a detailed tax-benefit model, is used for labor supply estimation. In contrast to a previous German ...
2004| Katharina Wrohlich
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DIW Discussion Papers 409 / 2004
We analyze optimal income taxes with deductions for work-related or consumptive goods. We consider two cases. In the first case (called a complex tax system) the tax authorities can exactly distinguish between consumptive and work-related expenditures. In the second case (called a simple tax system) this distinction is not exact. Assuming additively separable utility functions, we show that work-related ...
2004| Pio Baake, Rainald Borck, Andreas Löffler
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DIW Discussion Papers 408 / 2004
Tax competition for a mobile factor is different in "new economic geography settings" compared to standard tax competition models. The agglomeration rent which accrues to the mobile factor in the core region can be taxed. Moreover, a tax differential between the core and the periphery can be maintained. The present paper reexamines this issue in a setting which, in addition to the core-periphery equilibria, ...
2004| Rainald Borck, Michael Pflüger
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DIW Discussion Papers 394 / 2004
Estimating labor supply functions using a discrete rather than a continuous specification has become increasingly popular in recent years. On basis of the German Socioeconomic Panel (GSOEP) I test which specification of discrete choice is the appropriate model for estimating labor supply: the standard conditional logit model or the random coefficient model. To the extent that effect heterogeneity is ...
2004| Peter Haan
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DIW Discussion Papers 369 / 2003
The paper presents a model where public pensions are determined by majority voting. Voters differ by age and income. Moreover, life expectancy increases with income. Depending on the strength of the link between contributions and benefits, and the relationship between income and life expectancy, individually optimal tax rates may increase or decrease with income. If they decrease, high tax rates are ...
2003| Rainald Borck
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DIW Discussion Papers 335 / 2003
This note studies the choice of tax structure in a majority voting model with tax competition. Regions may tax mobile capital or immobile labor. Individuals differ with respect to their relative endowments of labor and capital. Even though a lump sum tax is available, the equilibrium capital tax in a jurisdiction may be positive. In a symmetric equilibrium, this will be true if the median capital endowment ...
2003| Rainald Borck
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DIW Discussion Papers 329 / 2003
This paper analyzes voting on a linear income tax which is redistributed lump sum to the taxpayers. Individuals can evade taxes, which leads to penalties if evasion is detected. Since preferences satisfy neither single peakedness nor single crossing, an equilibrium may not exist. When it does exist, it may have interesting properties, in particular, the poor and the rich may form a coalition against ...
2003| Rainald Borck
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DIW Discussion Papers 297 / 2002
This paper shows that stricter enforcement may increase tax evasion. Individuals vote on a linear income tax which is used to finance lump sum transfers. Stricter enforcement may make redistributive taxation more attractive to the decisive voter. The tax rate and transfer may rise which in turn may increase tax evasion. An example shows that this result can actually occur. The paper also discusses ...
2002| Rainald Borck