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Did the Tax Cuts Increase Hours of Work? A Statistical Analysis of a Natural Experiment


  • Klevmarken, N Anders


Effects on hours worked of cuts in the Swedish income taxes are analyzed using longitudinal data that cover periods before and after a major tax reform in 1991. The results show that working males probably changed their hours very little as a result of reduced marginal tax rates, while women increased their hours in the order of 10 per cent. One can thus conclude that the tax reforms increased gender equality in workhours. Most of this effect comes directly from the tax changes and not through a change in the after tax net wage rate, a result that is not explained by a conventional myopic labor supply model with a static budget set. Copyright 2000 by WWZ and Helbing & Lichtenhahn Verlag AG

Suggested Citation

  • Klevmarken, N Anders, 2000. "Did the Tax Cuts Increase Hours of Work? A Statistical Analysis of a Natural Experiment," Kyklos, Wiley Blackwell, vol. 53(3), pages 337-362.
  • Handle: RePEc:bla:kyklos:v:53:y:2000:i:3:p:337-62

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    References listed on IDEAS

    1. Flam, Harry, 2003. "Turkey and the EU: Politics and Economics of Accession," Seminar Papers 718, Stockholm University, Institute for International Economic Studies.
    2. World Bank, 2003. "World Development Indicators 2003," World Bank Publications, The World Bank, number 13920.
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    Cited by:

    1. André Decoster & Pieter Vanleenhove, 2012. "In-Work Tax Credits in Belgium :An Analysis of the Jobkorting Using a Discrete Labour Supply Model," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 55(2), pages 121-150.
    2. HÃ¥kan Selin, 2009. "The Rise in Female Employment and the Role of Tax Incentives - An Empirical Analysis of the Swedish Individual Tax Reform of 1971," CESifo Working Paper Series 2629, CESifo Group Munich.
    3. Peter Ericson & Lennart Flood & Nizamul Islam, 2015. "Taxes, wages and working hours," Empirical Economics, Springer, vol. 49(2), pages 503-535, September.
    4. Zheng, Liping & Severe, Sean, 2016. "Teaching the macroeconomic effects of tax cuts with a quasi-experiment," Economic Analysis and Policy, Elsevier, vol. 51(C), pages 55-65.
    5. Selén, Jan, 2002. "Taxable Income Responses to Tax Changes - A Panel Analysis of the 1990/91 Swedish Reform," Working Paper Series 177, Trade Union Institute for Economic Research.

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