Regression‐Kink Approach for Wage Effect on Male Work Hours
利用边际税率跳跃导致的平均税率扭结特征，提出回归扭结方法估计税后工资对工作时间的因果效应，并应用于韩国男性数据，得到较大的劳动供给弹性估计。
In finding the effect of after‐tax wage rate on work hours, the main difficulty is the endogeneity of after‐tax wage rate that equals ‘one minus average tax rate’ times wage rate. To overcome this endogeneity problem, we take advantage of jumps in the marginal income tax rate, which is a regression discontinuity (RD) idea. This RD, in turn, makes the average income tax rate ‘kink‐continuous’, which is a regression kink (RK) idea. We provide a simple economic model resulting in the RD and RK features, explain how to implement RK in practice, and then apply our methods to Korean male data. Our main RK‐based labour supply elasticity estimate 7.16% turned out to be insignificant with t ‐value 1.52, but it is much larger than most estimates in the literature. This may be attributed to, among other things, the facts that the RK instrument is unique, that RK identifies only the local elasticity at the kink point and that RK requires large data as regression derivatives are estimated.