751 20 UPPSALA, Sweden
Institutional Affiliation: Uppsala Universitet
Information about this author at RePEc
NBER Working Papers and Publications
|December 2017||The Bunching Estimator Cannot Identify the Taxable Income Elasticity|
with Whitney Newey: w24136
Bunching estimators were developed and extended by Saez (2010) and Chetty et. al. (2011). Using this method one can get an estimate of the taxable income elasticity from the bunching pattern around a kink point. The bunching estimator has become popular, with a large number of papers applying the method. In this paper, we show that the bunching estimators cannot identify the taxable income elasticity when the functional form of the distribution of preference heterogeneity is unknown. We find that an observed distribution of taxable income around a kink point or over the whole budget set can be consistent with any positive taxable income elasticity if the distribution of heterogeneity is unrestricted.
If one is willing to assume restrictions on the heterogeneity density some information ab...
with Roger Gordon
in Public Policy and Retirement, Trans-Atlantic Public Economics Seminar (TAPES), Sören Blomquist and Roger Gordon, organizers
|October 1998||Tax Reform Evaluation Using Nonparametric Methods: Sweden 1980 - 1991|
with Matias Eklof, Whitney Newey: w6759
This paper evaluates the tax reforms carried out in Sweden between 1980 and 1991. We use a recently developed nonparametric estimation technique to account for labor supply responses. We decompose the tax returns to study how the separate components influence hours of work, tax revenues distribution. The results indicate that the reform was underfinanced and that the increased indirect taxation and redesigned transfer system almost eliminated the positive effects on hours of work due to the decreased marginal taxes on labor income. Further the predictions of a parametric estimated labor supply model. The responses of the parametric model is almost twice the size of the nonparametric.
Published: Blomquist, Soren, Matias Eklof and Whitney Newey. "Tax Reform Evaluation Using Non-Parametric Methods: Sweden 1980-1991," Journal of Public Economics, 2001, v79(3,Mar), 543-568. citation courtesy of