Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Increasing Hours Worked: Moonlighting Responses to a Large Tax Reform†

Increasing Hours Worked: Moonlighting Responses to a Large Tax Reform† AbstractMoonlighting is increasingly popular in OECD countries, with 5 to 10 percent of workers holding two or more jobs. However, little is known about the responsiveness of moonlighting to financial incentives due to the lack of identifying variation. This paper studies a unique reform in Germany that allowed workers to hold small secondary jobs tax-free, decreasing the marginal tax rate by between 19.5 to 66 pp. I show that the reform resulted in a dramatic increase in moonlighting that was not offset by reductions in primary earnings and that hours constraints are a key determinant of moonlighting. (JEL H24, H31, J22, J31) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Economic Policy American Economic Association

Increasing Hours Worked: Moonlighting Responses to a Large Tax Reform†

Download PDF

Increasing Hours Worked: Moonlighting Responses to a Large Tax Reform†

Tazhitdinova, Alisa
American Economic Journal: Economic Policy , Volume 14 (1) – Feb 1, 2022

Abstract

AbstractMoonlighting is increasingly popular in OECD countries, with 5 to 10 percent of workers holding two or more jobs. However, little is known about the responsiveness of moonlighting to financial incentives due to the lack of identifying variation. This paper studies a unique reform in Germany that allowed workers to hold small secondary jobs tax-free, decreasing the marginal tax rate by between 19.5 to 66 pp. I show that the reform resulted in a dramatic increase in moonlighting that was not offset by reductions in primary earnings and that hours constraints are a key determinant of moonlighting. (JEL H24, H31, J22, J31)

Loading next page...
 
/lp/american-economic-association/increasing-hours-worked-moonlighting-responses-to-a-large-tax-reform-42qjXXIuTZ

References

References for this paper are not available at this time. We will be adding them shortly, thank you for your patience.

Publisher
American Economic Association
Copyright
Copyright © 2022 © American Economic Association
ISSN
1945-7731
DOI
10.1257/pol.20190786
Publisher site
See Article on Publisher Site

Abstract

AbstractMoonlighting is increasingly popular in OECD countries, with 5 to 10 percent of workers holding two or more jobs. However, little is known about the responsiveness of moonlighting to financial incentives due to the lack of identifying variation. This paper studies a unique reform in Germany that allowed workers to hold small secondary jobs tax-free, decreasing the marginal tax rate by between 19.5 to 66 pp. I show that the reform resulted in a dramatic increase in moonlighting that was not offset by reductions in primary earnings and that hours constraints are a key determinant of moonlighting. (JEL H24, H31, J22, J31)

Journal

American Economic Journal: Economic Policy – American Economic Association

Published: Feb 1, 2022

There are no references for this article.