TY  - JOUR
AU  - Neumark,David
TI  - Are Rising Wage Profiles a Forced-Saving Mechanism?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4213
PY  - 1992
Y2  - November 1992
UR  - http://www.nber.org/papers/w4213
L1  - http://www.nber.org/papers/w4213.pdf
N1  - Author contact info:
David Neumark
Department of Economics
University of California at Irvine
3151 Social Science Plaza
Irvine, CA  92697
Tel: 949-824-8496
Fax: 949/824-2182
E-Mail: dneumark@uci.edu
AB  - This paper tests the hypothesis that rising earnings profiles are a mechanism by which individuals engage in forced saving. It does this by examining the cross-sectional relationship between overwithholding on income tax payments--behavior that is consistent with a preference for forced saving--and the slopes of age-earnings profiles. The force-saving hypothesis receives some support from earnings regression estimates. Individuals who receive tax refunds are on earnings profiles that are steeper and have lower intercepts, although the evidence is statistically significant in only a subset of the specifications estimated. On average, individuals who receive refunds have about one percentage point faster earnings growth per year.
ER  -