Work

Job search under changing labour taxes

Year: 2025

Type: article

Abstract: Workers’ job mobility decisions are related to firms’ wage policies but also depend on tax schedules. Using Norwegian population-wide administrative linked employer-employee data for 2010-2019, we study how the job-to-job turnover of employees is affected by marginal taxes and firms’ pay policies, thus drawing inferences on job search behaviour. By paying higher wages, job-to-job separation rates drop, but this negative relationship is weakened when income taxes increase, consistent with higher taxes reducing search activity. However, consistent with theory, the tax effect is smaller where workers receive performance bonuses.

Source: Labour Economics

DOI: 10.1016/j.labeco.2025.102750

Authors: Alex Bryson, Harald Dale-Olsen

Institutions: University College London, National Institute of Economic and Social Research, Institute for Social Research

Language: English

Topic: Labor market dynamics and wage inequality

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,240