Lifetime Versus Annual Tax‐And‐Transfer Progressivity: Sweden, 1968–2009
27 Pages Posted: 17 Nov 2016
Date Written: October 2016
Abstract
In this paper, we analyze the evolution of tax‐and‐transfer progressivity in Sweden over both annual and lifetime horizons. Using a rich micro panel covering the period 1968–2009, we calculate tax rates over a cohort's entire working life cycle. Our main finding is that taxes are considerably less progressive over the lifetime than in any single year. Social insurance transfers to transitory low‐income earners account for most of this result. We offer a number of robustness checks of the measurement of lifetime incomes and progressivity, but none of them changes our overall findings.
Keywords: Income distribution, lifetime income, redistributive effect, tax progressivity, transfers
JEL Classification: D31, H20
Suggested Citation: Suggested Citation
CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
IZA Institute of Labor Economics
P.O. Box 7240
Bonn, D-53072
Germany
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Lifetime Versus Annual Tax‐And‐Transfer Progressivity: Sweden, 1968–2009
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