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Job Search, Efficiency Wages and Taxes

Author

Listed:
  • Bryson, Alex

    (University College London)

  • Dale-Olsen, Harald

    (Institute for Social Research, Oslo)

Abstract

Norwegian workers' job mobility decisions are related to firms' wage policies, but also depend on the national tax schedule. By utilising Norwegian population-wide administrative linked employer-employee data on workers and firms between 2010-2019, we study how the job-to-job turnover of employees is affected by marginal taxes and firms' pay policies, enabling inferences to be made about on-the-job search. Paying higher wages is associated with a drop in job-to-job separation rates, but this negative relationship is weakened when income taxes increase. Higher taxes imply strictly reduced search activity, but less so for bonus job-workers than salaried workers.

Suggested Citation

  • Bryson, Alex & Dale-Olsen, Harald, 2024. "Job Search, Efficiency Wages and Taxes," IZA Discussion Papers 17385, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17385
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    References listed on IDEAS

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    More about this item

    Keywords

    job search; marginal taxes; monopsony; wages; effort;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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