Is Simple Better? A Conjoint Analysis of the Effects of Tax Complexity on Employee Preferences Concerning Company Pension Plans

Schmalenbach Business Review, Vol. 61, pp. 60-83, January 2009

24 Pages Posted: 28 Jan 2009

See all articles by Kay Blaufus

Kay Blaufus

Leibniz Universität Hannover

Renate Ortlieb

University of Graz

Date Written: January 1, 2009

Abstract

We theoretically and empirically analyze the influence of tax complexity on the employee's decision concerning company pension plans. Our model also considers employer signaling and information intermediation by various actors. The main result of our empirical analysis is that if tax complexity is high, then only a small proportion of the study participants bases their decision on their after-tax return. This proportion increases significantly if tax complexity is low. However, even in a simple tax system, many people do not base their decisions on after-tax returns, but instead follow the advice of an independent product rating agency or a works council representative.

Keywords: Company Pension Plans, Conjoint Analysis, Employer Signaling, Information Intermediation, Tax Complexity, Tax Simplification

JEL Classification: D81, H31, H55, M12, M52

Suggested Citation

Blaufus, Kay and Ortlieb, Renate, Is Simple Better? A Conjoint Analysis of the Effects of Tax Complexity on Employee Preferences Concerning Company Pension Plans (January 1, 2009). Schmalenbach Business Review, Vol. 61, pp. 60-83, January 2009, Available at SSRN: https://ssrn.com/abstract=1334067

Kay Blaufus (Contact Author)

Leibniz Universität Hannover ( email )

Institut für Betriebswirtschaftliche Steuerlehre
Koenigsworther Platz 1
Hannover, 30167
Germany

Renate Ortlieb

University of Graz ( email )

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