Pension Taxes and Labor Supply: Evidence from a Soviet Context

By Olga Malkova (University of Kentucky - Department of Economics) This study quantifies the effects of Soviet Russia’s 1960s reforms that gradually reduced the tax rate on pensions of employed pensioners from seventy-four to zero percent, and of the 1971 reform that substantially increased the minimum pension. The differential group eligibility and regional implementation allow me to use a differences-in-differences framework. Within a year after the tax rate fell from seventy-four to forty-one percent, employment rates rose by twenty-seven percent,...