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Estimating taxable income responses using Danish tax reforms

Kleven, Henrik Jacobsen and Schultz, Esben Anton (2014) Estimating taxable income responses using Danish tax reforms. American Economic Journal: Economic Policy, 6 (4). pp. 271-301. ISSN 1945-7731

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Identification Number: 10.1257/pol.6.4.271


This paper estimates taxable income responses using a series of Danish tax reforms and population-wide administrative data since 1980. The tax variation and data in Denmark makes it possible to overcome the biases from nontax changes in inequality and mean reversion that plague the existing literature. We provide compelling graphical evidence of taxable income responses, arguably representing the first nonparametrically identified evidence of taxable income elasticities using tax reforms. We also present panel regression evidence that is extremely robust to specification, unlike previous results which have been very sensitive.

Item Type: Article
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Additional Information: © 2014 American Economic Association
Divisions: Economics
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HJ Public Finance
JEL classification: D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H24 - Personal Income and Other Nonbusiness Taxes and Subsidies
H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents > H31 - Household
J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J22 - Time Allocation and Labor Supply
Date Deposited: 14 Apr 2016 11:40
Last Modified: 12 Jun 2024 04:18

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