Discrete choice models of labor supply easily account for nonlinearty and nonconvexity in budget sets caused by tax … 'preferences' appear nonconvex. Second, we show that the static unitary representation, implicit in most tax policy analyses, is … predicted labor supply responses to tax-benefit reforms is sensitive to the underlying household representation …

common empirical approach and a complete simulation of tax-benefit policies affecting household budgets. We find that wage … robust to several modeling assumptions. We show that differences in tax-benefit systems or demographic compositions explain …