Iceland's Natural Experiment in Supply-Side Economics

This experiment creates a unique opportunity to study the labor-supply response of individuals who were temporarily faced with a zero-marginal - and average - income tax rate. Moreover, the income effect was reduced because workers were still paying taxes, although not on income earned in 1987. In t...

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Veröffentlicht in:	The American economic review 2001-12, Vol.91 (5), p.1564-1579
Hauptverfasser:	Bianchi, Marco, Gudmundsson, Björn R., Zoega, Gylfi
Format:	Artikel
Sprache:	eng
Schlagworte:	Children Economic models Economics Employment Experiments Fiscal policy Iceland Income tax Income taxes Labor supply Labour supply Men Personal income taxes Self employment Shorter Papers Single status Statistical analysis Studies Supply side economics Tax base Tax cuts Tax rates Tax reform Taxation
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Beschreibung
Zusammenfassung:	This experiment creates a unique opportunity to study the labor-supply response of individuals who were temporarily faced with a zero-marginal - and average - income tax rate. Moreover, the income effect was reduced because workers were still paying taxes, although not on income earned in 1987. In this paper, a cross section of individuals in the period surrounding the tax reforms are studied to elarn about the responsiveness of labor supply to the tax cuts.
ISSN:	0002-8282 1944-7981
DOI:	10.1257/aer.91.5.1564