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A Decade of Tax and Benefit Reforms in Sweden - Effects on Labour Supply, Welfare and Inequality

  • Aronsson, Thomas
  • Palme, Mårten

    ()

    (Dept. of Economic Statistics, Stockholm School of Economics)

Sweden has experienced a sequence of tax and benefit reforms during the last decade. The purpose of this paper is to evaluate these extensive reforms from the points of view of labour supply, welfare and inequality. As a basis of the analysis, we use the household labour supply model, which is estimated using cross- section data from 1980. Simulation of the model reveals that tax and benefit reforms have led to a considerable reduction of the excess burden. Regarding inequality we are less conclusive, since these results depend on whether we define "income" as disposable income or money metric utility.

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Paper provided by Stockholm School of Economics in its series SSE/EFI Working Paper Series in Economics and Finance with number 18.

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Length: 41 pages
Date of creation: May 1994
Date of revision:
Publication status: Published in Economica, 1998, pages 39-67.
Handle: RePEc:hhs:hastef:0018
Contact details of provider: Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
Phone: +46-(0)8-736 90 00
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