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  • 1.
    Aalto, Aino-Maija
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
    Mörk, Eva
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics. Uppsala University, Units outside the University, Office of Labour Market Policy Evaluation.
    Sjögren, Anna
    Uppsala University, Units outside the University, Office of Labour Market Policy Evaluation.
    Svaleryd, Helena
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Childcare - A safety net for children? 2018Report (Other academic)
    Abstract [en]

    We analyze how access to childcare affects health outcomes of children with unemployed parents using a reform that increased childcare access in some Swedish municipalities. For 4–5 year olds, we find an immediate increase in infection-related hospitalization, when these children first get access to childcare. We find no effect on younger children. When children are 10–11 years of age, children who did not have access to childcare when parents were unemployed are more likely to take medication for respiratory conditions. Taken together, our results thus suggest that access to childcare exposes children to risks for infections, but that need for medication in school age is lower for children who had access.

  • 2.
    Aggeborn, Linuz
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Voter Turnout and the Size of Government2013Report (Other academic)
    Abstract [en]

    This paper investigates the causal link between voter turnout and policy outcomes related to the size of government. Tax rate and public expenditures are the focal policy outcomes in this study. To capture the causal mechanism, Swedish and Finnish municipal data are used and a constitutional change in Sweden in 1970 is applied as an instrument for voter turnout in local elections. In 1970, Sweden moved from having separate election days for different levels of government, among other things, to a system with a single election day for political elections, thus reducing the cost associated with voting. This constitutional reform increased voter turnout in local elections in Sweden. The overall conclusion of this paper is that higher voter turnout yields higher municipal taxes and larger local public expenditures. Second, there is some evidence that higher turnout decreases the vote share for right-wing parties

  • 3.
    Ando, Michihito
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    How Much Should We Trust Regression-Kink-Design Estimates?2013Report (Other academic)
    Abstract [en]

    In a Regression Kink (RK) design with a finite sample, a confounding smooth nonlinear relationship between an assignment variable and an outcome variable around a threshold can be spuriously picked up as a kink and result in a biased estimate. In order to investigate how well RK designs handle such confounding nonlinearity, I firstly implement Monte Carlo simulations and then study the effect of fiscal equalization grants on local expenditure using a RK design. Results suggest that RK estimation with a confounding nonlinearity often suffers from bias or imprecision and estimates are credible only when relevant covariates are controlled for.

  • 4. Aronsson, Thomas
    et al.
    Micheletto, Luca
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Sjogren, Tomas
    A note on public goods in a decentralized fiscal union: Implications of a participation constraint2014In: Journal of Urban Economics, ISSN 0094-1190, E-ISSN 1095-9068, Vol. 84, p. 1-8Article in journal (Refereed)
    Abstract [en]

    This paper re-examines the question of whether federal ex-post redistribution in terms of public funds leads to under-provision of public goods when member states may leave the economic federation. We show that federal ex-post redistribution under a binding participation constraint does not necessarily mean under-provision of local and federal public goods.

  • 5.
    Aronsson, Thomas
    et al.
    Department of Economics, Umeå School of Business and Economics, Umeå University.
    Micheletto, Luca
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Tomas, Sjögren
    Department of Economics, Umeå School of Business and Economics, Umeå University,.
    A note on public goods in a decentralized fiscal union: Implications of a participation constraint2012Report (Other academic)
  • 6.
    Bastani, Spencer
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Gender-Based and Couple-Based Taxation2013In: International Tax and Public Finance, ISSN 0927-5940, E-ISSN 1573-6970, Vol. 20, no 4 SI, p. 55p. 653-686Article in journal (Refereed)
    Abstract [en]

    In this paper, I explore the optimal taxation of singles and couples in an economy with bargaining couples. The government is concerned with the redistribution of income from individuals with high utility to individuals with low utility, recognizing that some individuals live in couple households where resources are unevenly distributed. I analyze how redistributive linear income taxes, which depend on either gender or household composition (or both) impact the distribution of utility within and across households. An interesting implication arising from the interaction between the model elements is that even though between-group lump-sum transfers always favor women, when the bargaining power of men is high, women are subject to a higher tax rate; this in contrast to previous analyses of gender-based taxation. My quantitative analysis demonstrates that the welfare effects of gender-based taxation are sizable and even larger when taxes depend on the composition of the household.

  • 7.
    Bastani, Spencer
    et al.
    Department of Economics and Statistics, Linnaeus University.
    Blomquist, Sören
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Micheletto, Luca
    Depatrment of Law, University of Milan.
    Child Care Subsidies, Quality, and Optimal Income Taxation2017Report (Other academic)
    Abstract [en]

    In this paper we examine the desirability of subsidizing child care expenditures in a model where parents can choose both the quantity and the quality of child care services they purchase in the market. Our vehicle of analysis is a Mirrleesian optimal tax framework where child care services not only enable parents to work, but also contribute to children's formation of human capital. In addition, there are externalities related to the parents' choice of child care arrangements for their offspring. Using a quantitative simulation model calibrated to the US economy, we evaluate the relative merits of some the most common forms of child care subsidies (tax deductions, tax credits, and opting-out public provision schemes) in terms of their effectiveness in alleviating the distortions associated with income taxation and increasing the quality of child care chosen by parents.

  • 8.
    Bastani, Spencer
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Blomquist, Sören
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Micheletto, Luca
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Public Provision of Private Goods, Tagging and Optimal Income Taxation with Heterogeneity in Needs2010Report (Other academic)
    Abstract [en]

    Previous literature has shown that public provision of private goods can be a welfareenhancing device in second-best settings where governments pursue redistributive goals. However, three issues have so far been neglected. First, the case for supplementing an optimal nonlinear income tax with public provision of private goods has been made in models where agents dier only in terms of market ability. Second, the magnitude of the welfare gains achievable through public provision schemes has not been assessed. Third, the similarities/dierences between public provision schemes and tagging schemes have not been thoroughly analyzed. Our purpose in this paper is therefore threefold: rst, to extend previous contributions by incorporating in the theoretical analysis both heterogeneity in market ability and in the need for the publicly provided good; second, to perform numerical simulations to quantify the size of the potential welfare gains achievableby introducing a public provision scheme, and to characterize the conditions under which these welfare gains are sizeable; nally, to compare the welfare gains from public provision with the welfare gains from tagging.

  • 9.
    Bastani, Spencer
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
    Blomquist, Sören
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Micheletto, Luca
    Welfare Gains Of Age-Related Optimal Income Taxation2013In: International Economic Review, ISSN 0020-6598, E-ISSN 1468-2354, Vol. 54, no 4, p. 1219-1249Article in journal (Refereed)
    Abstract [en]

    Using an overlapping generations model with skill uncertainty and private savings, we quantify the gains of age-dependent labor income taxation. The total steady-state welfare gain of switching from age-independent to age-dependent nonlinear taxation varies between 2.4% and 4% of GDP. Part of the gain descends from relaxing incentive-compatibility constraints and part is due to capital-accumulation effects. The welfare gain is of about the same magnitude as that which can be achieved by moving from linear to nonlinear income taxation. Finally, the welfare loss from tax-exempting interest income is negligible under an optimal age-dependent labor income tax.

  • 10.
    Bastani, Spencer
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Blomquist, Sören
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Pirttilä, Jukka
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies. University of Tampere.
    Optimal Inequality behind the Veil of How Should Commodities Be Taxed?: A Counterargument to the Recommendation in the Mirrlees Review2013Report (Other academic)
    Abstract [en]

    The Mirrlees Review recommends that commodity taxation should in general be uniform, but with some goods consumed in conjunction with labour supply (such as child care) left untaxed. This paper examines the validity of this claim in an optimal income tax framework. Contrary to the recommendation of the Review, our theoretical results imply that even if all goods other than the good needed for working are separable from leisure, the optimal tax on these goods should not be uniform. Instead, goods with larger expenditure elasticities should be discouraged relatively more by the tax system. If the government fully subsidises the cost of the good needed for working, then commodity taxation is uniform under the standard separability assumption. Our results imply that the optimal commodity tax system is dependent on the expenditure side of the government. A calibration exercise presented in the paper suggests that these results can be quantitatively important.

  • 11.
    Bastani, Spencer
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Blumkin, Tomer
    Department of Economics, Ben Gurion University, Israel.
    Micheletto, Luca
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    OptimalWage Redistribution in the Presence of Adverse Selection in the Labor Market2014Report (Other academic)
    Abstract [en]

    In this paper we allude to a novel role played by the non-linear income tax system in the presence of adverse selection in the labor market due to asymmetric information between workers and firms. We show that an appropriate choice of the tax schedule enables the government to affect the wage distribution by controlling the transmission of information in the labor market. This represents an additional channel through which the government can foster the pursuit of its redistributive goals.

  • 12.
    Belotti, Federico
    et al.
    Univ Roma Tor Vergata, Dept Econ & Finance, I-00133 Rome, Italy.
    Di Porto, Edoardo
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies. Univ Naples Federico II, CSEF, Naples, Italy;Uppsala Univ, UCFS, Uppsala, Sweden.
    Santoni, Gianluca
    CEPII, TSA 10726, F-75334 Paris 07, France.
    Spatial Differencing: Estimation and Inference2018In: CESifo Economic Studies, ISSN 1610-241X, E-ISSN 1612-7501, Vol. 64, no 2, p. 241-254Article in journal (Refereed)
    Abstract [en]

    Spatial differencing (SD) is a spatial data transformation pioneered by Holmes (1998) increasingly used to estimate causal effects with non-experimental data. Recently, this transformation has been widely used to deal with omitted variable bias generated by local or site-specific unobservables in a 'boundary-discontinuity' design setting. However, as is well known in this literature, SD makes inference problematic. Indeed, given a specific distance threshold, a sample unit may be the neighbor of a number of units on the opposite side of a specific boundary inducing correlation between all differenced observations that share a common sample unit. By recognizing that the SD transformation produces a special form of dyadic data, we show that the dyadic-robust variance matrix estimator proposed by Cameron and Miller (2014) is, in general, a better solution compared to the most commonly used estimators.

  • 13.
    Belotti, Federico
    et al.
    CEIS, University of Rome Tor Vergata.
    Di Porto, Edoardo
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Santoni, Gianluca
    CEPII.
    The effect of local taxes on firm performance: evidencefrom geo-referenced data2016Report (Other academic)
  • 14.
    Bennmarker, Helge
    et al.
    Uppsala University, Units outside the University, Office of Labour Market Policy Evaluation.
    Skans, Oskar Nordström
    Uppsala University, Units outside the University, Office of Labour Market Policy Evaluation. Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
    Vikman, Ulrika
    Uppsala University, Units outside the University, Office of Labour Market Policy Evaluation. Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Workfare for the old and long-term unemployed2013In: Labour Economics, ISSN 0927-5371, E-ISSN 1879-1034, Vol. 25, p. 25-34Article in journal (Refereed)
    Abstract [en]

    We estimate the effects of conditioning benefits on program participation among older long-term unemployed workers. We exploit a Swedish reform which reduced UI duration from 90 to 60 weeks for a group of older unemployed workers in a setting where workers who exhausted their benefits received unchanged transfers if they agreed to participate in a work practice program. Our results show that job finding increased as a result of the shorter duration of passive benefits. The time profile of the job-finding effects suggests that the results are due to deterrence during the program-entry phase. We find no impact on ensuing job durations or wages, suggesting that the increased job-finding rate was driven by increased search intensity rather than lower reservation wages. A crude cost-benefit analysis suggests that the reform reduced the combined cost of programs and transfers.

  • 15.
    Blomquist, Sören
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Christiansen, Vidar
    Micheletto, Luca
    Public Provision of Private Goods and Nondistortionary Marginal Tax Rates2010In: American Economic Journal: Economic Policy, ISSN 1945-7731, Vol. 2, no 2, p. 1-27Article in journal (Refereed)
    Abstract [en]

    Using an optimal taxation model combined with a previously neglected scheme of public provision of private goods, we show that there is an efficiency gain if public provision of selected goods replaces market purchases and that efficiency requires marginal income tax rates to be higher than if the goods were purchased in the market. Part of the marginal tax serves the same role as a market price and conveys information about a real social cost of working more hours. It might be that economies with higher marginal tax rates have less severe distortions than economies with lower marginal tax rates. (JEL H21, H42, I38).

  • 16.
    Blomquist, Sören
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Christiansen, Vidar
    Univ Oslo, N-0317 Oslo, Norway..
    Micheletto, Luca
    Univ Milan, I-20122 Milan, Italy..
    Public Provision of Private Goods, Self-Selection, and Income Tax Avoidance2016In: Scandinavian Journal of Economics, ISSN 0347-0520, E-ISSN 1467-9442, Vol. 118, no 4, p. 666-692Article in journal (Refereed)
    Abstract [en]

    Redistributive taxation should benefit those with low earnings capacity rather than those who choose a lower income to obtain tax savings. Several contributions have highlighted how public provision of work complements can discourage people from lowering labor supply to diminish taxable income. We show how tax avoidance, previously neglected, can alter the conclusions regarding public provision. Tax avoidance breaks the link between labor supply and reported income. An agent reducing his reported income to escape taxes might no longer forego a publicly provided labor complement, because he can now lower his income by avoiding more rather than working less.

  • 17.
    Blomquist, Sören
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Christiansen, Vidar
    University of Oslo.
    Micheletto, Luca
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Public provision of private goods, self-selection and income tax avoidance2011Report (Other academic)
    Abstract [en]

    Several contributions in the optimal taxation literature have emphasized that, when individuals. preferences are not separable between leisure and other goods, it is desirable to supplement a nonlinear income tax with public provision of private goods. Moreover, it has also been shown that the choice between a topping-up and an opting-out scheme depends on whether the publicly provided good is a complement or substitute with leisure, with opting-out (topping-up) being the preferred scheme for goods which are substitutes (complements) for labor. In this paper, using the self-selection approach to tax analysis, we revisit these results in the presence of tax avoidance, and investigate how public provision interacts withthe agents.incentives to engage in tax avoidance. Three results are obtained. First, we show that tax dodging opportunities imply that non-separability between labor and other goods is neither a necessary nor a sufficient condition to make public provision of private goods a welfare-enhancing policy instrument. Second, we show how tax dodging opportunities limit the scope for using topping-up provision schemes as a redistributive device. Finally, we show that, for most of the public provision schemes previously analyzed in the literature, being a welfare-enhancing policy instrument goes hand in hand with weakening the agents.incentives to shelter income from the tax authority. However, we also point out an important exceptionto this pattern.

  • 18.
    Blomquist, Sören
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Kumar, Anil
    Dallas Federal Reserve.
    Liang, Che-Yuan
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Newey, Whitney K.
    Department of Economics, MIT.
    Individual Heterogeneity, Nonlinear Budget Sets, and Taxable Income2014Report (Other academic)
    Abstract [en]

    Given the key role of the taxable income elasticity in designing an optimal tax system there are many studies attempting to estimate this elasticity. A problem with most of these studies is that strong functional form assumptions are used and that heterogeneity in preferences is not allowed for. Building on Blomquist and Newey (2002) we in this paper develop a nonparametric method to estimate expected taxable income as a function of a nonlinear budget set, taking multidimensional heterogeneity and optimization errors fully into account. We reduce the dimensionality of the problem by exploiting structure implied by utility maximization with piecewise linear convex budget sets. We apply the method to Swedish data and estimate for prime age males a significant net of tax elasticity of 0.6 and a significant income elasticity of -0.08.

  • 19.
    Blomquist, Sören
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Newey, Whitney K
    MIT Economics.
    The Kink and Notch Bunching Estimators Cannot Identify the Taxable Income Elasticity2018Report (Other academic)
    Abstract [en]

    Bunching estimators were developed and extended by Saez (2010), Chetty et al. (2011) and Kleven and Waseem (2013). Using this method one can get an estimate of the taxable income elasticity from the bunching pattern around a kink point. The bunching estimator has become popular, with a large number of papers applying the method. In this paper, we show that the bunching estimator cannot identify the taxable income elasticity when the functional form of the distribution of preference heterogeneity is unknown. We find that an observed distribution of taxable income around a kink point or over the whole budget set can be consistent with any positive taxable income elasticity if the distribution of heterogeneity is unrestricted. If one is willing to assume restrictions on the heterogeneity density some information about the taxable income elasticity can be obtained. We give bounds on the taxable income elasticity based on monotonicity of the heterogeneity density and apply these bounds in an example. We also consider identification from budget set variation. We find that kinks alone may not be informative even when budget sets vary. However, if the taxable income specification is restricted to be of the parametric isoelastic form assumed in Saez (2010) the taxable income elasticity can be well identified from variation among budget sets. The key condition is that the tax rates at chosen taxable income differ across budget sets for some individuals.

  • 20.
    Blomquist, Sören
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Selin, Håkan
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Hourly wage rate and taxable labor income responsiveness to changes in marginal tax rates2010In: Journal of Public Economics, ISSN 0047-2727, E-ISSN 1879-2316, Vol. 94, no 11-12, p. 878-889Article in journal (Refereed)
    Abstract [en]

    Recently, a voluminous literature estimating the taxable income elasticity has emerged as an important field in empirical public economics. However, to a large extent it is still unknown how the hourly wage rate, an important component of taxable income, reacts to changes in marginal tax rates. In this study we use a rich panel data set and a sequence of tax reforms that took place in Sweden during the 1980s to estimate the elasticity of the hourly wage rate as well as the taxable labor income elasticity with respect to the net-of-tax rate. We also estimate elasticities with respect to the non-labor income in a way that is novel in the literature. While carefully accounting for the endogeneity of marginal tax rates we find a statistically significant response in wage rates both among married men and women. The estimates of the hourly wage rate elasticity with respect to the net-of-tax rate fall in the range of 0.14-0.16 for males and 0.41-0.57 for females, whereas the corresponding taxable labor income elasticity estimates hover between 0.19-0.21 for males and 0.96-1.44 for women. Moreover, for men we find that the taxable labor income elasticity with respect to non-labor income is statistically significant; the point estimate being -0.07. This implies that the compensated taxable labor income elasticity is about 5 percentage points higher than the uncompensated one. In general, we consider the estimates for males to be more certain and robust than the estimates for females.

  • 21.
    Carneiro, Pedro
    et al.
    University College London, Department of Economics, Cemmap, Institute fo Fiscal Studies.
    Ginja, Rita
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Long-Term Impacts of Compensatory Preschool on Health and Behavior: Evidence from Head Start2014In: American Economic Journal: Economic Policy, ISSN 1945-7731, E-ISSN 1945-774X, Vol. 6, no 4, p. 135-173Article in journal (Refereed)
    Abstract [en]

    This paper provides new estimates of the medium- and long-term impacts of Head Start on health and behavioral problems. We identify these impacts using discontinuities in the probability of participation induced by program eligibility rules. Our strategy allows us to identify the effect of Head Start for the individuals in the neighborhoods of multiple discontinuities. Participation in the program reduces the incidence of behavioral problems, health problems, and obesity of male children at ages 12 and 13. It lowers depression and obesity among adolescents, and it reduces engagement in criminal activities and idleness for young adults.

  • 22.
    Carneiro, Pedro
    et al.
    UCL, Inst Fiscal Studies, Ctr Microdata Methods & Practice, London WC1E 6BT, England..
    Ginja, Rita
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Partial Insurance and Investments in Children2016In: Economic Journal, ISSN 0013-0133, E-ISSN 1468-0297, Vol. 126, no 596, p. F66-F95Article in journal (Refereed)
    Abstract [en]

    This article studies the impact of permanent and transitory shocks to income on parental investments in children. We use panel data on family income and an index of investments in children, from the Children of the National Longitudinal Survey of Youth. We find that there is partial insurance of parental investments against permanent income shocks but the magnitude of the estimated responses is small. We cannot reject the hypothesis of full insurance against temporary shocks. Another interpretation of our findings is that insurance possibilities are limited but the fact that skill is a non-separable function of parental investments over time results in small reactions of these investments to income shocks, especially at later ages.

  • 23.
    Casarico, Alessandra
    et al.
    Bocconi University.
    Micheletto, Luca
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Sommacal, Alessandro
    Faculty of Economics, University of Verona.
    Intergenerational transmission of skills during childhood and optimal public policy2015In: Journal of Population Economics, ISSN 0933-1433, E-ISSN 1432-1475, no 28, p. 48p. 353-372Article in journal (Refereed)
    Abstract [en]

    The paper characterizes the optimal tax policy and the optimal quality of day care services in a OLG model with warm-glow altruism where parental choices over child care arrangements a effct the probability that the child becomes a high-skilled adult in a type-specific way. With respect to previous contributions, optimal tax formulas include type-specific Pigouvian terms which correct for the intergenerational externality in human capital accumulation. Our numerical simulations suggest that a public policy that disregards the effects of parental time on children's human capital entails a welfare loss that ranges from 0.2% to 5.7% of aggregate consumption.

  • 24. Chakraborty, Indraneel
    et al.
    Holter, Hans
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Stepanchuk, Serhiy
    Marriage Stability, Taxation and Aggregate Labor Supply in the U.S. vs. Europe2012Report (Other academic)
    Abstract [en]

    Americans work more than Europeans. Using micro data from the U.S. and 17 European countries, we study the contributions from demographic subgroups to these aggregate level dierences. We document that women are typically the largest contributors to the discrepancy in work hours. We also document a negative empirical correlation between hours worked and dierent measures of taxation, driven by men, and a positive correlation between hours worked and divorce rates, driven by women. Motivated by these observations, we develop a life-cycle model with heterogeneous agents, marriage and divorce and use it to study the impact of two mechanisms on labor supply: (i) dierences in marriage stability and (ii) dierences in tax systems. We calibrate the model to U.S. data and study how labor supply in the U.S. changes as we introduce European tax systems, and as we replace the U.S. divorce and marriage rates with their European equivalents. We nd that the divorce and tax mechanisms combined explain 58% of the variation in labor supply between the U.S. and the European countries in our sample.

  • 25.
    Cipullo, Davide
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Runoff vs. Plurality: Does It Matter for Expenditures? Evidence from Italy2018Report (Other academic)
    Abstract [en]

    This paper compares the runoff system and the plurality rule in terms of the size and composition of public expenditures. I use the change in the voting rule in Italian municipalities at 15,000 residents to implement a regression discontinuity design. The results show that municipalities under the runoff system spend at least 20 percent more than those under the plurality rule, and that this effect is primarily driven by a large increase in administrative spending. Additionally, the greater number of candidates and the larger coalitions indicate lower accountability under the runoff system than under the plurality rule.

  • 26. Conley, John P.
    et al.
    Crucini, Mario J.
    Driskill, Robert A.
    Önder, Ali Sina
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    The Effects Of Publication Lags On Life-Cycle Research Productivity In Economics2013In: Economic Inquiry, ISSN 0095-2583, E-ISSN 1465-7295, Vol. 51, no 2, p. 1251-1276Article in journal (Refereed)
    Abstract [en]

    We investigate how increases in publication delays have affected the life cycle of publications of recent Ph.D. graduates in economics. We construct a panel dataset of 14,271 individuals who were awarded Ph.D.s between 1986 and 2000 in U.S. and Canadian economics departments. For this population of scholars, we amass complete records of publications in peer-reviewed journals listed in the JEL (a total of 368,672 observations). We find evidence of significantly diminished productivity in recent relative to earlier cohorts when productivity of an individual is measured by the number of AER-equivalent publications. Diminished productivity is less evident when the number of AER-equivalent pages is used instead. Our findings are consistent with earlier empirical findings of increasing editorial delays, decreasing acceptance rates at journals, and a trend toward longer manuscripts. This decline in productivity is evident in both graduates of top 30 and non-top 30 ranked economics departments and may have important implications for what should constitute a tenurable record. We also find that the research rankings of top economics departments are a surprisingly poor predictor of the subsequent research rankings of their Ph.D.s graduates. 

  • 27.
    Dahlberg, Mattias
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Law, Department of Law.
    Önder, Ali Sina
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Taxation of Cross-Border Labor Income and Tax Revenue Sharing in the Öresund Region2014Report (Other academic)
    Abstract [en]

    Due to the Nordic Tax Treaty, commuters pay their income taxes where they earn income. This creates problems in local government finances in Scania County of Sweden, because the number of commuters received on both sides of the Öresund Strait is not symmetric, but the flow from Scania County of Sweden into Copenhagen County of Denmark is about 25 times as large as the other way around. This paper aims to document asymmetries in commuter flows in the Öresund Region and the loss in income tax revenue due to the asymmetric magnitudes in the flow of commuters. We propose renewed negotiations between Sweden and Denmark on the income taxation in the Öresund Region in order to sustain local public services in the region.

  • 28.
    Dahlberg, Matz
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Institute for Housing and Urban Research. Uppsala University, Units outside the University, Office of Labour Market Policy Evaluation. Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Are Local Governments Governed by Forward Looking Decision Makers?: An Investigation of Spending Patterns in Swedish Municipalities”, Journal of Urban1998In: Journal of Urban Economics, ISSN 0094-1190, E-ISSN 1095-9068, p. 254-271Article in journal (Refereed)
  • 29.
    Dahlberg, Matz
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Institute for Housing and Urban Research. Uppsala University, Units outside the University, Office of Labour Market Policy Evaluation. Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Small Sample Properties of Jackknife IV and LIML Estimators:: Experiments with Weak Instruments1999In: Journal of applied econometrics (Chichester, England), ISSN 0883-7252, E-ISSN 1099-1255, p. 69-88Article in journal (Refereed)
  • 30.
    Dahlberg, Matz
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Edmark, Karin
    IFN.
    Lundqvist, Heléne
    Stockholms universitet.
    Ethnic Diversity and Preferences for Redistribution: Reply2013Report (Other academic)
    Abstract [en]

    In a comment to Dahlberg, Edmark and Lundqvist (2012), Nekby and Pettersson-Lidbom (2012) argue (i) that the refugee placement program should be measured with contracted rather than actually placed refugees, and claim that the correlation between the two measures is insignificant and close to zero; (ii) that instead of using the rotating individual panel, we should have used the full cross-sections in combination with municipality xed eects; and (iii) that immigrants should be dened based on country of birth rather than citizenship. In this response, we discuss why we (i) do not agree that contracted refugees is the preferred measure, and we show that the correlation between the two measures is highly significant and large; (ii) do not agree that the full cross-sections can be used; and (iii) do agree that defining immigrants according to country of birth is preferred. In a re-analysis, the conclusion from Dahlberg, Edmark and Lundqvist (2012) that ethnic diversity has a statistically and economically significant negative effect on preferences for redistribution is only marginally affected.

  • 31. De Arcangelis, Giuseppe
    et al.
    Di Porto, Edoardo
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Santoni, Gianluca
    Migration, labor tasks and production structure2015In: Regional Science and Urban Economics, ISSN 0166-0462, E-ISSN 1879-2308, Vol. 53, p. 156-169Article in journal (Refereed)
    Abstract [en]

    We assess the effect of migrants' stock on the production structure of the Italian provinces (NUTS3) in 1995-2006. Although the investigated time span is very short, the effect is small but statistically significant: a doubling in the ratio of foreign-born residents to the province population induces a significant increase in manufactures' value added with respect to services' value added between 12 and 21 per cent. These effects are more intense when considering an increase in foreign-born populations drawn from countries more different to Italy (in terms of GDP per capita and educational attainment). These results are compatible with the reduced form of a two-sector model where we assume that production is performed with one mobile factor and two sector-specific CES labor composites of simple and complex tasks. If migrants and natives have different productivity when performing simple or complex tasks, an inflow of migrants induces production restructuring in favor of the simple-task intensive sector. (C) 2015 Elsevier B.V. All rights reserved.

  • 32.
    Di Porto, Edoardo
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies. Univ Naples Federico II, CSEF, Naples, Italy.
    Elia, Leandro
    European Commiss, JRC, Via E Fermi 2749, I-21027 Ispra, VA, Italy..
    Tealdi, Cristina
    Sch Adv Studies, IMT, Lucca, Italy..
    Informal work in a flexible labour market2017In: Oxford Economic Papers, ISSN 0030-7653, E-ISSN 1464-3812, Vol. 69, no 1, p. 143-164Article in journal (Refereed)
    Abstract [en]

    Informal employment is a pervasive and persistent feature of most developing and developed economies. Labour taxation and labour market regulations are deemed two major causes for operating in the informal sector. Using data from France, Italy, and Spain, we analyse gross job flows and gross worker flows in the formal and informal sectors in the presence of lenient employment protection legislation, and investigate the way traditional policy interventions may favour transitions from one sector to the other. We show that optimal outcomes in terms of reduction and formalisation of informal jobs across the three countries examined are achieved with the combination of lower payroll taxes for permanent contracts and higher inspection rate for firms operating in the informal sector. Coupling lower firing costs with more frequent labour inspections also reduces informality, but this comes at the cost of an increased ratio of temporary to total employment.

  • 33.
    Di Porto, Edoardo
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Ohlsson, Henry
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
    Avoiding taxes by transfers within the family2016Report (Other academic)
    Abstract [en]

    We document an episode with considerable tax avoidance that occurred in Italy after 2008 when the Italian government reformed the property taxation by abolishing taxation on principal residences and increasing taxation on secondary properties. In presence of a very low inter vivos gift tax, Italian families found it benecial to redistribute properties among their members. Dierence-in-dierence estimates indicate that property tax reform increased the probability that high-wealth donors made an inter vivos property gift by 3 percentage points and the size transferred by 4 square meters relative to less wealthy donors. Our estimates allow us to compute (back of the envelope) the amount of tax avoidance due to inter vivos transfer. The amount is around 78 million euros, or 4 percent of the annual tax revenue from principal residences.

  • 34.
    Di Porto, Edoardo
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies. Univ Naples Federico II, DISES, I-80126 Naples, Italy.;Univ Naples Federico II, CSEF, I-80126 Naples, Italy; Via Cintia,Monte S Angelo 1, I-80126 Naples, Italy..
    Parenti, Angela
    IMT Sch Adv Studies Lucca, Piazza S Ponziano 6, I-55100 Lucca, Italy..
    Paty, Sonia
    Univ Lumiere Lyon 2, Univ Lyon, CNRS, GATE Lyon St Etienne, 93 Chemin Mouilles, F-69130 Ecully, France..
    Abidi, Zineb
    CREM CNRS Univ Caen Normandie, F-14032 Caen 5, France..
    Local government cooperation at work: a control function approach2017In: Journal of Economic Geography, ISSN 1468-2702, E-ISSN 1468-2710, Vol. 17, no 2, p. 435-463Article in journal (Refereed)
    Abstract [en]

    We analyse voluntary coalition formation using a unique panel data for 1056 municipalities in the French region of Brittany between 1995 and 2002. We use a control function approach to develop a binary discrete choice model with spatial interactions. We find that a municipality's decision to cooperate over the provision of local public goods depends on the decisions made by its neighbours. In particular, the probability of cooperating with neighbouring municipalities is higher if the latter already provide joint local public goods. This suggests that functional cooperation is likely to emerge due to a mimicking motivation and is poorly motivated by political alignment. The results are in line with the recent applied spatial economics literature but are derived for a discrete choice model setting.

  • 35.
    Du Rietz, Gunnar
    et al.
    Research Institute of Industrial Economics.
    Henrekson, Magnus
    Research Institute of Industrial Economics.
    Waldenström, Daniel
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Swedish Inheritance and Gift Taxation, 1885–20042012Report (Other academic)
    Abstract [en]

    This paper studies the evolution of the modern Swedish inheritance taxation from its

    introduction in 1885 to its abolishment in 2004. A thorough description is offered of the basic

    principles of the tax, including underlying ideas and ambitions, tax schedules, and rules

    concerning valuation of assets, liability matters and deduction opportunities. Using these rules, we calculate inheritance tax rates for the whole period for a number of differently endowed family firms and individuals. The overall trend in inheritance tax burden exhibits an inverse-U shape for all firms and individuals. Up until the end of World War I, inheritance tax rates were very low (never above four percent). Tax rates began to increase in the interwar period with tax hikes in 1918, 1920 and 1934. After World War II tax rates increased rapidly for both inherited firms and individual fortunes. Effective tax rates peaked in the mid-1970s. Valuation reliefs were introduced in the 1970s, which sharply reduced tax rates for inherited family businesses. Tax rates for deceased individuals having non-corporate wealth were first cut in 1987 and then significantly reduced in 1991–1992. Finally, inheritance and gift tax revenues were relatively small, typically 0.1 to 0.2 percent of GDP.

  • 36.
    Edmark, Karin
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Gordon, Roger
    University of California, San Diego.
    Taxes and the Choice of Organizational Form by Entrepreneurs in Sweden2013Report (Other academic)
    Abstract [en]

    This paper estimates the role of both tax and non-tax determinants in the choice in Sweden to be a closely-held corporation vs. a proprietorship, using individual data for 2004 to 2008 on owners of closely-held businesses. While lower-income individuals face relatively neutral incentives, higher income individuals face strong tax incentives to be corporate. The data suggest a relatively strong correlation between these tax incentives and the likelihood that a firm is corporate. Many conventional non-tax determinants are confirmed in the data as well.

  • 37.
    Edmark, Karin
    et al.
    Stockholm Univ, CESIfo, IFAU, IFN, SE-10691 Stockholm, Sweden.;UCLS, SE-10691 Stockholm, Sweden..
    Liang, Che-Yuan
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies. Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Institute for Housing and Urban Research. IBF, POB 514, SE-75120 Uppsala, Sweden..
    Mörk, Eva
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies. Uppsala Univ, UCFS, UCLS, CESifo,IZA, POB 513, SE-75120 Uppsala, Sweden.;IEB, POB 513, SE-75120 Uppsala, Sweden..
    Selin, Håkan
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies. Uppsala University, Units outside the University, Office of Labour Market Policy Evaluation. UCLS, CESifo, POB 513, SE-75120 Uppsala, Sweden..
    The Swedish Earned Income Tax Credit: Did It Increase Employment?2016In: Finanzarchiv, ISSN 0015-2218, E-ISSN 1614-0974, Vol. 72, no 4, p. 475-503Article in journal (Refereed)
    Abstract [en]

    This paper analyzes the extensive-margin labor-supply effects of a Swedish earned income tax credit introduced in 2007. The reform was one of the government's flagship reforms to boost employment, but its actual effects have been widely debated. We exploit the fact that the size of the tax credit is a function of the municipality of residence and income if working, which yields two sources of quasi-experimental variation. The identifying variation, however, turns out to be small and potentially endogenous, which means that the question of whether the reform has delivered the hoped-for effects cannot be credibly answered.

  • 38.
    Elinder, Mikael
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Erixson, Oscar
    IFN.
    Escobar, Sebastian
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
    Ohlsson, Henry
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Estates, bequests, and inheritances in Sweden - A look into the Belinda databases2014Report (Other academic)
    Abstract [en]

    The objective of this paper is to describe two new administrative

    Swedish databases, referred to as the Belinda databases. Together, these

    databases contain the most detailed individual-level data on estates, bequests,

    and inheritances currently available. We present descriptive statistics

    for the key variables in the databases to give a picture of the size of

    estates, the content of the bequests, and who the recipients of the inheritances

    are. The statistics may serve as a point of reference for other

    scholars, but also as an illustration of the various research possibilities that

    the databases provide and how the data can be matched with other administrative

    registers. We also, briefly, describe the institutional context

    regarding intergenerational transfers in Sweden, including the inheritance

    law and the inheritance tax.

  • 39.
    Elinder, Mikael
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Erixson, Oscar
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Waldenström, Daniel
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Inheritance and wealth inequality: Evidence from population registers2015Report (Other academic)
  • 40.
    Elinder, Mikael
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies. Res Inst Ind Econ, SE-10215 Stockholm, Sweden..
    Escobar, Sebastian
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Petré, Ingel
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
    Consequences of a price incentive on free riding and electric energy consumption2017In: Proceedings of the National Academy of Sciences of the United States of America, ISSN 0027-8424, E-ISSN 1091-6490, Vol. 114, no 12, p. 3091-3096Article in journal (Refereed)
    Abstract [en]

    This article shows that a simple monetary incentive can dramatically reduce electric energy consumption (EEC) in the residential sector and simultaneously achieve a more desirable allocation of EEC costs. The analyses are based on data from a policy experiment conducted in 2011 and 2012 by a private housing company in about 1,800 apartments. Roughly 800 of the tenants (treatment group) were subject to a change from having unlimited EEC included in their rent to having to pay the market price for their own EEC. This change was achieved by installing EEC meters in each apartment. Tenants in the other 1,000 apartments (control group) experienced no policy change and were subject to apartment-level billing and metering during the entire study period. Using a quasiexperimental research design and daily data on EEC from 2007 to 2015, we estimate that apartment-level billing and metering permanently reduce EEC by about 25%. Moreover, we show that households reduce EEC immediately after being informed that they will be billed for EEC, the reduction is larger when the production cost is higher, and the reduction in EEC comes almost exclusively from households with very high EEC before the policy change. Finally, we show that apartment-level billing and metering are cost-effective, with a cost per reduced kilowatt hour of US$0.01, and for each invested dollar, the social value of reductions in air pollution, including CO2 emissions, is $2.

  • 41.
    Elinder, Mikael
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Persson, Lovisa
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies. Res Inst Ind Econ IFN, POB 55665, SE-10215 Stockholm, Sweden.
    House price responses to a national property tax reform2017In: Journal of Economic Behavior and Organization, ISSN 0167-2681, E-ISSN 1879-1751, Vol. 144, p. 18-39Article in journal (Refereed)
    Abstract [en]

    We show that house prices in general did not respond to a substantial cut in the nationalproperty tax in Sweden. The estimates are based on rich register data covering more than 100,000 sales over a time period of two and a half years. Because the Swedish property tax isnational and thus unrelated to local public goods, our setting is ideal for causal identificationof the property tax on house prices. We observe price increases only in a small segment ofthe market containing properties with very high tax values. We discuss, but can admittedlynot empirically discriminate between, several potential explanations for why we find noevidence of capitalization except for the top segment of the market.

  • 42.
    Engström, Per
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Hagen, Johannes
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Income underreporting among the self-employed: a permanent income approach2017In: European Economic Review, ISSN 0014-2921, E-ISSN 1873-572X, Vol. 92, p. 24p. 92-109Article in journal (Refereed)
    Abstract [en]

    The consumption based method to estimate underreporting among self-employed, introduced by Pissarides andWeber (1989), is one of the workhorses in the empirical literature on tax evasion/avoidance. We show that failure to account for transitory income fluctuations in current income may overestimate the degree of underreporting by around 40 percent. Previous studies typically use instrumental variable methods to address the issue. In contrast, our access to registry based longitudinal income measures allows a direct approach based on more permanent income measures. This also allows us to evaluate the performance of a list of instruments widely used in the previous literature. Our analysis shows that capital income is the most suitable instrument in our application, while education and housing related measures do not seem to satisfy the exclusion restrictions.

  • 43.
    Engström, Per
    et al.
    Uppsala University, Units outside the University, Office of Labour Market Policy Evaluation. Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies. Uppsala Center for Labor Studies (UCLS).
    Hägglund, Pathric
    Johansson, Per
    Uppsala University, Units outside the University, Office of Labour Market Policy Evaluation. Institute of Labor Economics (IZA); Inspektionen för socialförsäkringen (ISF); Uppsala Center for Labor Studies (UCLS).
    Early Interventions and Disability Insurance: Experience from a Field Experiment2017In: Economic Journal, ISSN 0013-0133, E-ISSN 1468-0297, Vol. 127, no 600, p. 363-392Article in journal (Refereed)
    Abstract [en]

    We estimate the effects of early assessments of an individual's need for vocational rehabilitation in the Swedish sickness insurance system using a field experiment. One of the interventions increases the flow to disability benefits by 20%. The effect is larger for unemployed individuals, who also are covered by the sickness insurance scheme. This result is in line with a theoretical model with moral hazard and asymmetric information in which individuals with low work incentives communicate worse health in response to the assessment for rehabilitation which then increases the hazard to disability benefits.

  • 44.
    Engström, Per
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
    Nordblom, Katarina
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Ohlsson, Henry
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Persson, Annika
    The Swedish Tax Agency.
    Loss evasion and tax aversion2015In: American Economic Journal: Economic Policy, Vol. 7, p. 42p. 132-164Article in journal (Refereed)
    Abstract [en]

    The objective of this paper is to study if taxpayers behave in a loss aversemanner when filing their tax returns. This is important for tax design but alsofor understanding human behavior in general. The predictions of prospecttheory can be contrasted to those of expected utility theory. We use datafor 3.6 million Swedish taxpayers for the income year 2006. Our researchmethod is quasi-experimental using a regression kink and discontinuity approach.We also use an alternative instrumental-variables approach. There isstrong evidence of loss aversion. We estimate the coefficient of loss aversionusing actual behavior and the instrument-variables approach. Our estimate isvery close to the estimates reported in the experimental literature.

  • 45.
    Engström, Per
    et al.
    Uppsala University, Units outside the University, Office of Labour Market Policy Evaluation. Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Nordblom, Katarina
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Stefánsson, Arnaldur
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
    Multiple Misbehaving: Loss Averse and Inattentive to Monetary Incentives2018Report (Other academic)
    Abstract [en]

    We study what determines taxpayers’ deduction behavior when filing tax returns. Preliminary deficits might be viewed as losses assuming zero preliminary balance as reference point. Swedish taxpayers may escape these losses by claiming deductions after receiving information about the preliminary balance. Furthermore, the Swedish income tax system has a substantial kink (20 percentage points) where the central government tax applies. Taxpayers slightly above the governmental tax kink have substantially higher (standard economic) incentives to claim deductions than taxpayers slightly below the kink. Using a regression kink and discontinuity approach with individual fixed effects, we study a panel of 4.1 million Swedish taxpayers in 1999 to 2006. We find strong causal effects of preliminary deficits on the probability of claiming deductions. The initial empirical evidence for a kink in deduction probability at the central government threshold, anticipated by standard economic theory, is weaker but significant. However, a more detailed analysis reveals that the kink at the tax threshold is not likely due to the tax incentives per se. When controlling for the preliminary tax deficit, the kink at the tax threshold disappears. Taxpayers just above the tax kink are namely more likely to run a preliminary tax deficit than those just below it. Hence, the most plausible explanation also for the kink at the tax threshold is therefore loss aversion and not standard economic incentives. The Swedish taxpayers are thus “misbehaving”, in a Thaler (2015) sense, on two separate margins: they are highly loss averse but surprisingly inattentive to standard monetary incentives.

  • 46.
    Erixson, Oscar
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies. Res Inst Ind Econ IFN, S-10401 Stockholm, Sweden..
    Health responses to a wealth shock: evidence from a Swedish tax reform2017In: Journal of Population Economics, ISSN 0933-1433, E-ISSN 1432-1475, Vol. 30, no 4, p. 1281-1336Article in journal (Refereed)
    Abstract [en]

    This paper makes two contributions to the literature on the effects of wealth on health. First, it deals with reverse causality and omitted variable bias by exploiting exogenous variation in inherited wealth generated by the repeal of the Swedish inheritance tax. Second, it analyzes responses in health outcomes through the use of administrative registers. The results show that increased wealth has limited short to medium run impacts on objective adult health. This is in line with what has previously been reported in the literature.

  • 47.
    Erixson, Oscar
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies. Research Institute of Industrial Economics (IFN).
    Health responses to a wealth shock: Evidence from a Swedish tax reform2014Report (Other academic)
    Abstract [en]

    This essay contributes in two ways to the literature on the effects of economic circumstances on health. First, it deals with reverse causality and omitted variable bias by exploiting exogenous variation in inherited wealth generated by the unexpected repeal of the Swedish inheritance tax. Second, it analyzes responses in health outcomes from administrative registers. The results show that increased wealth has limited impacts on objective adult health over a period of six years. This is in line with what has been documented previously regarding subjective health outcomes. If anything, it appears as if the wealth shock resulting from the tax reform leads people to seek care for symptoms of disease, which result in that cancer is detected and possibly treated earlier. One possible explanation for this preventive response is that good health is needed for enjoying the improved consumption prospects generated by the wealth shock.

  • 48.
    Erixson, Oscar
    et al.
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
    Escobar, Sebastian
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
    Inheritance tax planning at the end of life2018Report (Other academic)
    Abstract [en]

    There is a nongoing debate about whether inheritance and estate taxes are effective in raising revenues and in contributing to a more equal society. The different views on transfer taxes are largely dependent on beliefs about whether people plan their wealth to avoid these taxes. In this paper, we follow Kopczuk (2007) and study people’s planning response to the onset of terminal illness. An extension of Kopczuk’s work is that we can effectively control for responses in wealth caused by terminal illness but unrelated to tax planning. We do this by exploiting a tax reform in Sweden that removed the incentives for people to plan their estates to avoid inheritance taxation. We find some evidence of long-term terminal illness inducing responses consistent with tax planning, but that these are not widespread or efficient enough to reduce the overall tax burden in the study population. Our results, similarly to those of Kopczuk, show that people appear to postpone some decisions about their estates until shortly before death.

  • 49.
    Erixson, Oscar
    et al.
    The Research Institute of Industrial Economics (.
    Ohlsson, Henry
    Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.