Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1333: The Ability Gradient in Bunching

Daniel Waldenström () and Spencer Bastani ()
Additional contact information
Daniel Waldenström: Research Institute of Industrial Economics (IFN), Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Spencer Bastani: Department of Economics and Statistics, Postal: Linnaeus University

Abstract: We analyze the relationship between cognitive ability and bunching in the context of a large and salient kink point of the Swedish income tax schedule. Using population-wide register data from the Swedish military enlistment and administrative tax records, we find that high-ability individuals bunch more than low-ability individuals. This ability gradient is stronger for the self-employed, but is also present among wage earners. We also use high-school GPA and math grades to analyze gender differences, finding a stronger ability gradient among men.

Keywords: Bunching; Ability; Skills; Complexity; Optimal Taxation

JEL-codes: H21; H24; J22; J24

32 pages, April 22, 2020

Full text files 

wp1333.pdf PDF-file Full text

Download statistics

Questions (including download problems) about the papers in this series should be directed to Elisabeth Gustafsson ()
Report other problems with accessing this service to Sune Karlsson ().

RePEc:hhs:iuiwop:1333This page generated on 2024-09-13 22:15:51.