Marginal Tax Rates and Tax-Favoured Pension Savings of the Self-Employed - Evidence from Sweden

35 Pages Posted: 1 Jun 2010

See all articles by Hakan Selin

Hakan Selin

Uppsala University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: May 1, 2010

Abstract

In recent years, the study of how individuals respond to policies that aim at promoting pension savings has emerged as a vital area of economic research. This paper adds to this literature by estimating the tax price elasticity of contributions to tax-favoured pension savings accounts on a population of self-employed individuals. I exploit a unique total data base over the Swedish population that covers the years 1999 to 2005. Using instrumental variables, I obtain a tax price elasticity estimate of –0.51 and an income elasticity estimate of 0.13, whereas OLS produces estimates that conflict with consumer theory.

Keywords: income taxation, fringe benefits, individual pension savings, self-employment

JEL Classification: G23, H24, J33, J26

Suggested Citation

Selin, Hakan, Marginal Tax Rates and Tax-Favoured Pension Savings of the Self-Employed - Evidence from Sweden (May 1, 2010). CESifo Working Paper Series No. 3059, Available at SSRN: https://ssrn.com/abstract=1618192 or http://dx.doi.org/10.2139/ssrn.1618192

Hakan Selin (Contact Author)

Uppsala University - Department of Economics ( email )

Box 513
SE-75120 Uppsala
Sweden

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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