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Income Taxation And Labor Force Participation In Transition Economies: Evidence From Bulgaria, Russian Federation And Serbia

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  • Oybek Yuldashev
  • Obid Khakimov

    (Westminster International University in Tashkent
    Westminster International University in Tashkent)

Abstract

This paper provides the evidence of the impact of income taxation on the labor force participation in three transition economies, namely, Bulgaria, Russian Federation and Serbia. The evidence suggests that countries which inherited high labor force participation rates are relatively insensitive to changes in the wage rates induced by the changes in the personal income taxation. The estimations have been performed using Heckman (1979) methodology and results showed relatively small wage elasticities of labor force participation for both men and women. In contrast, the sensitivity of the labor force participation decision to changes in wages is found to be bigger for females. The insensitivity of the labor force participation to changes in personal income taxation in all countries under the study may bear serious implications for tax policy design.

Suggested Citation

  • Oybek Yuldashev & Obid Khakimov, 2011. "Income Taxation And Labor Force Participation In Transition Economies: Evidence From Bulgaria, Russian Federation And Serbia," Anadolu University Journal of Social Sciences, Anadolu University, vol. 11(3), pages 177-198, September.
    • Handle: RePEc:and:journl:v:11:y:2011:i:3:p:177-198
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    File URL: http://www.anadolu.edu.tr/arastirma/hakemli_dergiler/sosyal_bilimler/pdf/2011_3/2011-03-11.pdf
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    References listed on IDEAS

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    Cited by:

    1. Marianna Oliskevych & Iryna Lukianenko, 2020. "European unemployment nonlinear dynamics over the business cycles: Markov switching approach," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 22(4), pages 375-401.

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    More about this item

    Keywords

    Income taxation; Labor force participation; Labor supply; Heckman system of equations; Bulgaria; Russia; Serbia;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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