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SSRN Electronic Journal
Article . 2012 . Peer-reviewed
Data sources: Crossref
EconStor
Research . 2012
Data sources: EconStor
EconStor
Research . 2012
Data sources: EconStor
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Evaluation of the Swedish Earned Income Tax Credit

Authors: Edmark, Karin; Liang, Che-Yuan; Mörk, Eva; Selin, Håkan;

Evaluation of the Swedish Earned Income Tax Credit

Abstract

Over the last twenty years we have seen an increasing use of in-work tax subsidies to encourage labor supply among low-income groups. In Sweden, a non-targeted earned income tax credit was introduced in 2007, and was reinforced in 2008, 2009 and 2010. The stated motive of the reform was to boost employment; in particular to provide incentives for individuals to go from unemployment to, at least, part-time work. In this paper we try to analyze the extensive margin labor supply effects of the Swedish earned income tax credit reform up to 2008. For identification we exploit the fact that the size of the tax credit, as well as the resulting average tax rate, is a function of the municipality of residence and income if working. However, throughout the analysis we find placebo effects that are similar in size to the estimated reform effects. In addition, the results are sensitive with respect to how we define employment, which is especially true when we analyze different subgroups such as men and women, married and singles. Our conclusion is that the identifying variation is too small and potentially endogenous and that it is therefore not possible to use this variation to perform a quasi-experimental evaluation of the Swedish EITC-reform.

Country
Sweden
Keywords

Steuervergünstigung, Economics, ddc:330, J21, H24, tax incentives, Wirkungsanalyse, labor supply, Erwerbstätigkeit, labor force participation, Labor supply, Labor supply; labor force participation; tax incentives, Nationalekonomi, Arbeitsangebot, Schweden, jel: jel:J21, jel: jel:H24

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
3
Average
Average
Average
Green
bronze