Tax reform, wages, and employment: Evidence from Ohio

Kakpo, Eliakim (2018): Tax reform, wages, and employment: Evidence from Ohio.

Abstract

This paper evaluates the incidence of a natural experiment entailed by the 2005 Ohio tax reform. The policy reduced the corporate and personal income taxes over the period 2006-2010. I observe several cross-sections of the Current Population Survey and compare individuals in Ohio to similar individuals in Pennsylvania. Using a triple difference identification approach, I conclude that the reform significantly boosted labor force participation for women, specifically those with 5-year-old children and increased reported self-employment taxable earnings. However, it does not seem to have had a positive impact on corporate wages in the short-run.

• Item Type: MPRA Paper
• Language: English
• Keywords: Tax incidence, Income tax, Corporate tax, Self-employment, Wages, Employment
• Subjects: H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H20 - General; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H24 - Personal Income and Other Nonbusiness Taxes and Subsidies; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H25 - Business Taxes and Subsidies

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