Taxation in Matching Markets

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 13328

Classification and Topics

• Classification: Wirtschaft ; Bargaining Theory; Matching Theory
• Subject: matching ; taxation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dupuy, Arnaud ; Galichon, Alfred ; Jaffe, Sonia ; Kominers, Scott Duke
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/223770
• Last update: 10.03.2025, 11:41 AM CET