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Taxation and On-the-Job Training Decisions

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  • Rosen, Harvey S

Abstract

This paper is an econometric analysis of the on-the-job training (OJT) decisions of a group of white American males during 1975. The data are obtained from the Panel Study of Income Dynamics, which asked a very careful series of questions concerning the individual's OJT status. Each individual's internal rate of return is estimated and used as an explanatory variable to predict the probability of taking OJT. The individual's marginal tax rate is also entered in the equation. The results suggest that income taxation has tended to increase the probability of being involved in OJT. I conjecture that this is because income taxation makes investment in physical capital a less desirable vehicle for carrying consumption into the future, and hence increases the attractiveness of human capital.
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  • Rosen, Harvey S, 1982. "Taxation and On-the-Job Training Decisions," The Review of Economics and Statistics, MIT Press, vol. 64(3), pages 442-449, August.
    • Handle: RePEc:tpr:restat:v:64:y:1982:i:3:p:442-49
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    1. Carlo Perroni, 1997. "Joint Production of Goods and Knowledge: Implications for Tax Reform," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 4(2), pages 149-165, May.
    2. Mincer, Jacob, 1997. "The Production of Human Capital and the Life Cycle of Earnings: Variations on a Theme," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 26-47, January.
    3. Ana Paula Martins, 2018. "Concentration and Other Wage Determinants," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 61(3), pages 75-109.
    4. Lance Lochner & Alexander Monge-Naranjo, 2002. "Human Capital Formation with Endogenous Credit Constraints," NBER Working Papers 8815, National Bureau of Economic Research, Inc.
    5. Seung Mo Choi, 2008. "How Large are Learning Externalities? Measurement by Calibration," Working Papers 2008-26, School of Economic Sciences, Washington State University.
    6. Jacob Mincer, 1994. "Investment in U.S. Education and Training," NBER Working Papers 4844, National Bureau of Economic Research, Inc.
    7. Bijlsma, Michiel & Boone, Jan & Zwart, Gijsbert, 2009. "Selective contracting and foreclosure in health care markets," CEPR Discussion Papers 7576, C.E.P.R. Discussion Papers.
    8. Jacob Mincer, 1989. "Job Training: Costs, Returns, and Wage Profiles," NBER Working Papers 3208, National Bureau of Economic Research, Inc.
    9. Graafland, Johan J. & de Mooij, Ruud A., 1999. "Fiscal policy and the labour market: An AGE analysis," Economic Modelling, Elsevier, vol. 16(2), pages 189-219, April.
    10. Yanick Labrie & Claude Montmarquette, 2005. "La formation qualifiante et transférable en milieu de travail," CIRANO Project Reports 2005rp-04, CIRANO.
    11. Roland de Bruijn, 2006. "Scale Economies and Imperfect Competition in WorldScan," CPB Memorandum 140.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    12. Hungerbuhler, Mathias, 2007. "Tax progression and training in a matching framework," Labour Economics, Elsevier, vol. 14(2), pages 185-200, April.
    13. Voßmerbäumer, Jan & Wagner, Franz W., 2013. "Steuerwirkungen betrieblicher Entgeltpolitik," arqus Discussion Papers in Quantitative Tax Research 144, arqus - Arbeitskreis Quantitative Steuerlehre.

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