Ethnicity and Tax Filing Behavior

61 Pages Posted: 5 Apr 2019

See all articles by Spencer Bastani

Spencer Bastani

IFAU - Institute for Labour Market Policy Evaluation; Linnaeus University - Department of Economics and Statistics; Research Institute of Industrial Economics (IFN)

Thomas Giebe

Linnaeus University - Department of Economics and Statistics

Chizheng Miao

Linnaeus University - Department of Economics and Statistics

Multiple version iconThere are 2 versions of this paper

Date Written: 2019

Abstract

We analyze differences in tax filing behavior between natives and immigrants using population-wide Swedish administrative data, focusing on two empirical examples. First, controlling for a rich set of variables, we compare deduction behavior of immigrants and natives with the same commuting patterns within Sweden’s largest commuting zone. We find that newly arrived immigrants file fewer deductions than natives, that immigrants with a longer duration of stay in the host country behave more like natives, and that immigrants with the longest stay file the most, even more than natives. Second, we analyze bunching behavior among the self-employed at the salient first kink point of the Swedish central government income tax schedule, located in the upper middle part of the income distribution. We find that self-employed immigrants exhibit significantly less bunching behavior than natives, even after a long time in the host country. We highlight residential segregation as a main driver of the observed behavioral differences.

Keywords: deductions, tax filing, bunching, immigrants, natives, integration

JEL Classification: D310, H210, H240, H260, J220, J610

Suggested Citation

Bastani, Spencer and Giebe, Thomas and Miao, Chizheng, Ethnicity and Tax Filing Behavior (2019). CESifo Working Paper No. 7576, Available at SSRN: https://ssrn.com/abstract=3366591

Spencer Bastani (Contact Author)

IFAU - Institute for Labour Market Policy Evaluation ( email )

Box 513
751 20 Uppsala
Sweden

Linnaeus University - Department of Economics and Statistics ( email )

Växjö, 351 06
Sweden

Research Institute of Industrial Economics (IFN) ( email )

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

Thomas Giebe

Linnaeus University - Department of Economics and Statistics ( email )

Växjö, 351 06
Sweden

Chizheng Miao

Linnaeus University - Department of Economics and Statistics ( email )

Växjö, 351 06
Sweden

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