Tax progressivity and self-employment dynamics

Arulampalam, Wiji and Papini, Andrea (2018) Tax progressivity and self-employment dynamics. Centre for Business Taxation Working Paper, Oxford.

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Analysis of the relationship between taxes and self-employment should account for the interplay between responses in self-employment and wage employment. We estimate a two-state multi-spell duration model which accounts for both observed and unobserved heterogeneity using a large longitudinal administrative dataset for Norway for 1993-2011. Our findings conform to theoretical predictions, and are robust to various changes to definitions and sample selections. A policy experiment simulating a
flatter tax schedule in the year 2000,is found to encourage both entry into and exit from self-employment, with an increase of about 11.5 percent in net inflow into self-employment.

Item Type: Other Working Paper
Keywords: Oxford University Centre for Business Taxation; Tax progressivity; Income tax; Self-employment.
Subject(s): Taxation
Centre: Oxford University Centre for Business Taxation > CBT Working Papers
Date Deposited: 18 Jan 2019 15:58
Last Modified: 18 Jan 2019 15:58
Funders: Research Council of Norway

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