TY  - JOUR
AU  - Gentry,William M.
AU  - Hubbard,R. Glenn
TI  - The Effects of Progressive Income Taxation on Job Turnover
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9226
PY  - 2002
Y2  - September 2002
UR  - http://www.nber.org/papers/w9226
L1  - http://www.nber.org/papers/w9226.pdf
N1  - Author contact info:
William M. Gentry
Department of Economics
Williams College
Morey House
Williamstown, MA  01267
Tel: 413-597-4257
Fax:  413-597-4045
E-Mail: William.M.Gentry@williams.edu

R. Glenn Hubbard
Graduate School of Business
Columbia University, 101 Uris Hall
3022 Broadway
New York, NY  10027
Tel: 212/854-3493
Fax: 212/864-6184
E-Mail: rgh1@columbia.edu, ws2187@columbia.edu
AB  - We examine whether the level of the income tax rate and the convexity of the income tax schedule affect job mobility, as measured by moving to a better job. While the predicted effect of the level of the tax rate is ambiguous, we predict that an increase in the convexity of the tax schedule decreases job search activity by taxing away some of the benefits of a successful job search. Using data from the Panel Study of Income Dynamics, we estimate that both higher tax rates and increased tax rate progressivity decrease the probability that a head of household will move to a better job during the coming year. Our estimates imply that a five-percentage-point reduction in the marginal tax rate increases the average probability of moving to a better job by 0.79 percentage points (a 8.0 percent increase in the turnover propensity) and that a onestandard- deviation in our measure of tax progressivity would increase this probability by 0.86 percentage points (a 8.7 percent increase in the turnover propensity).
ER  -