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Key Findings Details

Taxes, Wages, and the Labor Supply of Older Americans
Lucie Schmidt and Purvi Sevak
WP 2006-139

  • A reduction in the marginal tax rate that would increase the payoff to working by 10 percent would increase labor force participation by 7.9 percent among men and 4.9 percent among women.
  • Among working retirees, a reduction in the marginal tax rate that would increase the payoff to working by 10 percent would result in an increase in hours worked of 5.3 percent for men and 3.6 percent for women.