Tax Reform, Sector-Specific Labor Supply and Welfare Effects

23 Pages Posted: 29 Apr 2009

See all articles by John K. Dagsvik

John K. Dagsvik

Statistics Norway

Marilena Locatelli

University of Turin - Department of Economics

Steinar Strøm

University of Oslo - Ragnar Frisch Centre for Economic Research; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: 2008-10

Abstract

This paper focuses in particular on the 1992 tax reform in Norway. In this reform the top marginal tax rates were cut considerably. We find that the impact on overall labor supply is rather modest, but these modest changes shadow for stronger sectoral changes. The tax reform stimulated the women to shift their labor from the public to the private sector and to work longer hours. A calculation of mean compensated variation, calculated within the framework of a random utility model, shows that the richest households benefited far more from the 1992 tax reform than did the poorest households.

Suggested Citation

Dagsvik, John K. and Locatelli, Marilena and Strøm, Steinar, Tax Reform, Sector-Specific Labor Supply and Welfare Effects (2008-10). Scandinavian Journal of Economics, Vol. 111, Issue 2, pp. 299-321, June 2009, Available at SSRN: https://ssrn.com/abstract=1396465 or http://dx.doi.org/10.1111/j.1467-9442.2009.01565.x

John K. Dagsvik (Contact Author)

Statistics Norway ( email )

N-0033 Oslo
Norway
22 86 48 71 (Phone)

Marilena Locatelli

University of Turin - Department of Economics ( email )

Lungo Dora Siena, 100A
Torino, 10156
Italy
+39 011 6703894 (Phone)
+39 011 6703895 (Fax)

HOME PAGE: http://www.de.unito.it/web/member/locatelli/personal-inf.htm

Steinar Strøm

University of Oslo - Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0317 Oslo
Norway

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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