Individual Income Tax Reform and Labour Supply:A Study Based on Adjustment Costs and Benefits
This paper analyses the impact of the 2011 and 2018 individual income tax reforms on labour supply in China,exploring the role that adjustment costs and benefits for workers play in individual labour behavioural decision-making.The study reveals that the 2011 individual tax reform increased the individual labour supply,and its labour incentive effects are significantly heterogeneous across gender,age and educational groups,while adjustment costs vary among different groups.On the other hand,adjustment costs weaken workers'behavioural responses to the reform.Finally,the contrasting study indicates that the impact of adjustment costs on workers in the 2018 individual tax reform is even broader compared to that in the 2011 reform.The paper suggests that when the government implements the individual income tax reform,it should comprehensively and accurately consider the adjustment costs and benefits for workers,optimise tax and employment policies,and continuously unleash the potential of labour supply.
individual income tax reformlabour supplyadjustment costsbunching approach
NETL
NSTL
万方数据
维普
