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Labor Supply When Tax Avoidance Matters

Author

Listed:
  • Agell, Jonas

    (Department of Economics)

  • Persson, Mats

    (Institute for International Economic Studies)

  • Sacklén, Hans

    (Trade Union Institute for Economic Research)

Abstract

We examine how tax avoidance in the form of trade in well-functioning asset markets affects the empirical study of labor supply. We discuss the implications for tax policy analysis, and we show that a failure to account for avoidance responses may lead to huge errors when predicting how tax reform affects labor supply, tax revenue, and the welfare cost of taxation. In conclusion we argue that our model may explain a number of otherwise hard to understand dimensions of tax payer response.

Suggested Citation

  • Agell, Jonas & Persson, Mats & Sacklén, Hans, 1999. "Labor Supply When Tax Avoidance Matters," Working Paper Series 157, Trade Union Institute for Economic Research.
    • Handle: RePEc:hhs:fiefwp:0157
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    References listed on IDEAS

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    More about this item

    Keywords

    Labour supply; Tax avoidance; Asset markets; Tax reform simulation;
    All these keywords.

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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