TY  - RPRT
        AU  - Barbanchon, Thomas Le
        TI  - Taxes Today, Benefits Tomorrow
        PY  - 2025/Jan/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 17600
        UR  - https://www.iza.org/publications/dp17600
        AB  - This paper tests whether partially unemployed workers value future preserved benefits when they bunch at the kink of the unemployment insurance benefit-withdrawal schedule. I extend the bunching formula of Saez (2010) to a dynamic setting that accounts for the value of future benefits tied to taxation. This yields new tests of tax-benefit linkage based on bunching heterogeneity. I verify in quasi-experiments that UI extension programs that decrease the value of future benefits lead to more bunching and to lower labor supply. Last, a quantification exercise of the dynamic bunching formula provides extra support for a strong tax-benefit linkage.
        KW  - tax-benefit linkage
KW  - bunching
KW  - unemployment insurance
        ER  -