Anders Frederiksen and Jan V. Hansen
Anders Frederiksen: Nationaløkonomisk Institut, Handelshøjskolen i Aarhus, Postal: Fuglesangs Allé 4, 8210 Aarhus
Jan V. Hansen: Det Økonomiske Råds Sekretariat, Postal: Landgreven 4, 1300 København, Danmark
Abstract: We introduce the Hausman method for estimation of labour supply and present some recent quantitative studies of Danish labour supply based on the approach. The preferred model is used for simulating the labour supply and wealth distribution impacts of alternative tax reforms which reduce the tax burden on wage income in different income ranges. Despite the relatively small labour supply elasticities, some of the experiments are almost self-financing, but the general picture is that levels of self-financing are modest. It turns out that the choices of tax reforms is important when considering inequality issues.
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