Income taxation, labor supply, and social preferences

Last registered on October 07, 2026
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Pre-Trial

Trial Information

General Information

Title
Income taxation, labor supply, and social preferences
RCT ID
AEARCTR-0019848
Initial registration date
October 01, 2026

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
October 07, 2026, 10:36 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

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Primary Investigator

Name
Janjala Chirakijja
Affiliation
Monash University
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Other Primary Investigator(s)

PI Name
Pinchuan Ong
PI Affiliation
National University of Singapore Business School
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Additional Trial Information

Status
In development
Start date
2026-10-02
End date
2027-01-31
Keywords
Behavior, Governance, Labor
Additional Keywords
labor supply elasticity, income taxation, social preferences, tax morale, public goods, vignette experiment
JEL code(s)
J22, H24, H31, H41, D63, D64
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Standard labor supply models assume that people respond to income taxes only through their effect on their own disposable income. Yet taxes usually apply to broad groups rather than to one person, so a tax change also affects what others pay, the revenue available for government spending, and a person's position relative to others. Our earlier vignette study (AEARCTR-0011052) found that stated labor supply responds less to tax increases than to financially equivalent wage cuts, consistent with social preferences affecting labor supply decisions. This study tests one explanation for that wedge: that responses to taxes depend not only on a person's own after-tax income but also on the consequences of taxation for others. Employed US adults aged 25–64 choose between pairs of hypothetical jobs that differ in hourly wage, weekly hours, and federal income tax rate. The pairs include matched sets in which a lower gross wage or a higher tax rate produces identical after-tax wage, with the same hours offered in both sets. Respondents are randomly told either that the tax rates shown apply to them alone, with everyone else keeping their current rate, or that they apply to everyone. Comparing the wage–tax response gap across the two framings shows how far responses to taxation depend on whether a tax is individually targeted or collectively applied. The results will inform whether models used to predict behavioral responses to taxation need to account for social preferences, including fairness considerations.
External Link(s)

Registration Citation

Citation
Chirakijja, Janjala and Pinchuan Ong. 2026. "Income taxation, labor supply, and social preferences." AEA RCT Registry. October 07. https://doi.org/10.1257/rct.19848-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
The intervention is a framing of the tax rates in a vignette experiment embedded in an online survey. After screening and background questions, respondents are randomly assigned to one of two arms that differ only in whom the scenario tax rates apply to. In the Only-you arm, respondents are told that the tax rate in each scenario applies to them alone, while everyone else keeps their current real-world tax rate. In the Everyone arm, respondents are told that each scenario changes tax rates for everyone: if one scenario has a higher tax rate than the other, everyone's tax rates are higher in that scenario. In both arms the federal government spends exactly what it collects. The framing is delivered in an animated instructional slideshow, checked by a comprehension question with feedback, and repeated in an on-screen reminder available on every scenario page. All other survey content is identical across arms.
Intervention Start Date
2026-10-02
Intervention End Date
2027-01-31

Primary Outcomes

Primary Outcomes (end points)
The wage–tax response gap in scenario choices, compared across arms
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
The choice between equal-after-tax-pay jobs in pair 10, compared across arms; considerations behind the pair 10 choice; within-arm gaps between responses to wages and tax rates; heterogeneity analyses by pre-treatment characteristics and by post-treatment attitude and preference measures; exploratory analyses will examine whether responses vary by the timing of survey completion relative to the 2026 US midterm elections and by respondents’ political affiliation or political views.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We field a vignette experiment embedded in an online survey of US residents aged 25–64 who are currently working, excluding the self-employed and unpaid family workers. Respondents are recruited through an online panel with quotas on age, sex, and earnings. After demographic, employment, and financial questions, respondents are randomly assigned with equal probability to one of the two framing arms. Each respondent then evaluates ten pairs of hypothetical job scenarios and states which scenario in each pair they prefer; in four pairs they also report expected monthly household spending under each scenario. Scenario values come from pre-set menus that depend on the respondent's current hourly wage and weekly hours. Most pairs come in matched sets: within a set, the two scenarios differ in after-tax wage by the same amount, but in one pair that difference comes from the gross wage and in the other from the tax rate. One pair is an attention check with a dominant option. The final pair offers two jobs with identical after-tax pay and hours but different gross wages and tax rates, followed by questions on the considerations behind that choice. The survey also collects political views, attitudes toward the federal government and taxation, preferences over government spending categories, and survey measures of social preferences.
Experimental Design Details
Not available
Randomization Method
Computer randomization by the survey platform (Qualtrics).
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
1,500 individuals (pilot of 500 plus wave 1 of 1,000)
Sample size: planned number of observations
15,000 scenario-pair choices (1,500 respondents × 10 pairs), of which 12,000 enter the primary gap analysis (8 matched-pair choices per respondent)
Sample size (or number of clusters) by treatment arms
About 750 Only-you and 750 Everyone (250 and 250 in the pilot; 500 and 500 in wave 1)
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Faculty Ethics Review Committee NUS Business School
IRB Approval Date
2026-08-13
IRB Approval Number
001701 (protocol amendment), Title: Labor supply responses to work incentives
Analysis Plan