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| Tekijä: | Blomquist, S. Selin, H. |
| Otsikko: | Hourly wage rate and taxable labor income responsiveness to changes in marginal tax rates |
| Lehti: | Journal of Public Economics
2010 : DEC, VOL 94:11-12 p. 878-889 |
| Asiasana: | income tax work Sweden |
| Vapaa asiasana: | wages |
| Kieli: | eng |
| Tiivistelmä: | Recently, a vast literature estimating the taxable income elasticity has emerged as a significant field in empirical public economics. However, it is still largely unknown how the hourly wage rate, an important component of taxable income, relates to changes in marginal tax rates. This study uses a rich panel data set and a sequence of tax reforms that occurred in Sweden during the 1980s to estimate the elasticity of the hourly wage rate and also the taxable labor income elasticity with respect to the net-of-tax rate. Elasticities with respect to the non-labor income are also estimated in a novel way. While carefully accounting for the endogeneity of marginal tax rates a statistically significant response is found in wage rates among married men and women. The estimates of the hourly wage rate elasticity with respect to the net-of-tax rate fall between 0.140.16 for males and 0.410.57 for females, while the corresponding taxable labor income elasticity estimates hover between 0.190.21 for males and 0.961.44 for women. Moreover, for men the taxable labor income elasticity with respect to non-labor income is statistically significant. This indicates that the compensated taxable labor income elasticity is about 5 percentage points higher than the uncompensated one. Generally, the estimates for males seem to be more certain and robust than the estimates for females. |
SCIMA