Income Mobility and Taxation

Aurora G. Hattrem, OFS scholarship recipient 2020

Abstract:

This thesis is an empirical investigation, examining how marginal tax rates on dividend income and marginal tax rates on wage income affect income mobility by letting two self-constructed income mobility indices be explained by tax variables in a multivariate Ordinary Least Squared (OLS) estimation of a distributed lag model. The mobility indices are obtained from Norwegian microdata containing population-wide income statistics from 2000 to 2018. Then aggregate mobility indices enter into a regression where marginal tax rates on dividend and wage income are the main explanatory variables. In the identification of effects, the analysis takes advantage of tax reforms over the period 2000 – 2018, generating variations in tax rates over time.

 

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Published Jan. 11, 2022 2:21 PM - Last modified Jan. 11, 2022 2:21 PM