TY  - JOUR
AU  - Brown,James N.
AU  - Rosen,Harvey S.
TI  - Taxation, Wage Variation, and Job Choice
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1284
PY  - 1988
Y2  - December 1988
UR  - http://www.nber.org/papers/w1284
L1  - http://www.nber.org/papers/w1284.pdf
N1  - Author contact info:
James N. Brown

Harvey S. Rosen
Department of Economics
Fisher Hall
Princeton University
Princeton, NJ 08544-1021
Tel: 609/258-4022
Fax: 609/258-6419
E-Mail: HSR@princeton.edu
AB  - This paper examines the effect of earnings taxes on the variability of wages over time. We estimate a "hedonic wage locus" which indicates how the market allows individuals to substitute the mean level of the wage for its variability across jobs. Information from this locus is used to estimate the parameters of individuals' indifference curves between the mean and temporal variation of hourly wages. On the basis of these utility function parameters, we predict that lowering the rate of taxation on earnings would on average lead workers to choose jobs with a higher pre-tax mean wage and with greater wage variation.
ER  -