Taxation in Matching Markets
We analyze the effects of taxation in two-sided matching markets where agents have heterogeneous preferences over potential partners. Our model provides a continuous link between models of matching with and without transfers. Taxes generate inefficiency on the allocative margin, by changing who matches with whom. This allocative inefficiency can be non-monotonic, but is weakly increasing in the tax rate under linear taxation if each worker has negative non-pecuniary utility of working. We adapt existing econometric methods for markets without taxes to our setting, and estimate preferences in the college-coach football market. We show through simulations that standard methods inaccurately measure deadweight loss.
Year of publication: |
2020
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Authors: | Dupuy, Arnaud ; Galichon, Alfred ; Jaffe, Sonia ; Kominers, Scott Duke |
Publisher: |
Bonn : Institute of Labor Economics (IZA) |
Subject: | matching | taxation |
Saved in:
freely available
Series: | IZA Discussion Papers ; 13328 |
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Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Working Paper |
Language: | English |
Other identifiers: | 1702032213 [GVK] hdl:10419/223770 [Handle] RePEc:iza:izadps:dp13328 [RePEc] |
Classification: | C78 - Bargaining Theory; Matching Theory ; D3 - Distribution ; H2 - Taxation, Subsidies, and Revenue ; J3 - Wages, Compensation, and Labor Costs |
Source: |
Persistent link: https://www.econbiz.de/10012270006