Lifetime Versus Annual Tax‐And‐Transfer Progressivity: Sweden, 1968–2009

27 Pages Posted: 17 Nov 2016

See all articles by Niklas Bengtsson

Niklas Bengtsson

Uppsala University

Bertil Holmlund

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

Daniel Waldenström

Uppsala University - Department of Economics; Research Institute of Industrial Economics (IFN)

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

Bengtsson, Niklas and Holmlund, Bertil and Waldenström, Daniel, Lifetime Versus Annual Tax‐And‐Transfer Progressivity: Sweden, 1968–2009 (October 2016). The Scandinavian Journal of Economics, Vol. 118, Issue 4, pp. 619-645, 2016. Available at SSRN: https://ssrn.com/abstract=2870827 or http://dx.doi.org/10.1111/sjoe.12160

Niklas Bengtsson (Contact Author)

Uppsala University ( email )

Bertil Holmlund

Uppsala University - Department of Economics ( email )

SE-75120 Uppsala
Sweden
+46 18 471 1122 (Phone)
+46 18 471 1478 (Fax)

HOME PAGE: http://www.nek.uu.se/faculty/holmlund/index.html

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

Daniel Waldenström

Uppsala University - Department of Economics ( email )

Box 513
SE-75120 Uppsala
Sweden

HOME PAGE: http://www.uueconomics.se/danielw

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

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