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Timing of death and the repeal of the Swedish inheritance tax

Author

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  • Eliason, M.
  • Ohlsson, H.

Abstract

In response to the repeal of the Swedish inheritance tax people postponed death to avoid taxes. This is an example of the far-reaching behavioral effects of economic incentives and of unintended consequences of policy changes. Using individual data, including information on taxable estates, we find that deceased with, compared to those without, tax incentives to postpone death were 10 percentage points more likely to die the day after rather than the day before the repeal. An extended analysis suggests that the timing of deaths was affected not only during these two days but during a longer surrounding period.

Suggested Citation

  • Eliason, M. & Ohlsson, H., 2013. "Timing of death and the repeal of the Swedish inheritance tax," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 113-123.
  • Handle: RePEc:eee:soceco:v:45:y:2013:i:c:p:113-123
    DOI: 10.1016/j.socec.2013.05.002
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    References listed on IDEAS

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    1. Tamm, Marcus, 2013. "The Impact of a Large Parental Leave Benefit Reform on the Timing of Birth around the Day of Implementation," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 585-601.
    2. Gans Joshua S & Leigh Andrew, 2006. "Did the Death of Australian Inheritance Taxes Affect Deaths?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 6(1), pages 1-9, November.
    3. Joshua Gans & Andrew Leigh, 2009. "The millennium bub," Applied Economics Letters, Taylor & Francis Journals, vol. 16(14), pages 1467-1470.
    4. Miccinesi, Guido & Fischer, Susanne & Paci, Eugenio & Onwuteaka-Philipsen, Bregje D & Cartwright, Colleen & van der Heide, Agnes & Nilstun, Tore & Norup, Michael & Mortier, Freddy, 2005. "Physicians' attitudes towards end-of-life decisions: a comparison between seven countries," Social Science & Medicine, Elsevier, vol. 60(9), pages 1961-1974, May.
    5. Gans, Joshua S. & Leigh, Andrew, 2009. "Born on the first of July: An (un)natural experiment in birth timing," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 246-263, February.
    6. Michael Neugart & Henry Ohlsson, 2013. "Economic incentives and the timing of births: evidence from the German parental benefit reform of 2007," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(1), pages 87-108, January.
    7. Eliason, Marcus & Ohlsson, Henry, 2008. "Living to save taxes," Economics Letters, Elsevier, vol. 100(3), pages 340-343, September.
    8. Wojciech Kopczuk & Joel Slemrod, 2003. "Dying to Save Taxes: Evidence from Estate-Tax Returns on the Death Elasticity," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 256-265, May.
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    Citations

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    Cited by:

    1. Elinder Mikael & Erixson Oscar & Ohlsson Henry, 2012. "The Impact of Inheritances on Heirs' Labor and Capital Income," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-37, December.
    2. Liam J.A. Lenten & Jan Libich & Petr Stehlík, 2013. "Policy Timing and Footballers' Incentives," Journal of Sports Economics, , vol. 14(6), pages 629-655, December.
    3. Michael Neugart & Henry Ohlsson, 2013. "Economic incentives and the timing of births: evidence from the German parental benefit reform of 2007," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(1), pages 87-108, January.
    4. repec:spr:jopoec:v:30:y:2017:i:4:d:10.1007_s00148-017-0651-2 is not listed on IDEAS
    5. Magnus Henrekson & Daniel Waldenström, 2016. "Inheritance taxation in Sweden, 1885–2004: the role of ideology, family firms, and tax avoidance," Economic History Review, Economic History Society, vol. 69(4), pages 1228-1254, November.
    6. repec:eee:regeco:v:70:y:2018:i:c:p:360-372 is not listed on IDEAS
    7. Erixson, Oscar, 2014. "Health Responses to a Wealth Shock: Evidence from a Swedish Tax Reform," Working Paper Series 1011, Research Institute of Industrial Economics.

    More about this item

    Keywords

    Behavioral responses to taxes; Estate tax; Inheritance tax; Tax avoidance; Mortality;

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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