The impact of Covid-19 on economic activity: evidence from administrative tax registers

Nikolay Angelov () and Daniel Waldenström ()
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Nikolay Angelov: The Swedish Tax Agency
Daniel Waldenström: Research Institute for Industrial Economics (IFN)

International Tax and Public Finance, 2023, vol. 30, issue 6, No 10, 1718-1746

Abstract: Abstract We use tax-register data on all firms in Sweden to document the impact of the Covid-19 pandemic on firm sales, tax payments, and sick pay. The pandemic impact is identified using within-year, between-year, and geographical variation, and we also run placebo tests. Our findings confirm large negative economic effects of the pandemic but shed new light on their magnitudes and sensitivity to Covid-19 morbidity rates. Specifically, we find that VAT and firm sales dropped more than other indicators of corporate activity such as industrial electricity usage or aggregate industrial production. Short-term sick pay increased during the pandemic, but, unlike tax payments, it was insensitive to local infection rates, which indicates behavioral responses to more generous sickness insurance rules during the pandemic.

Keywords: Covid-19 impact; VAT; Excise taxes; Sick pay (search for similar items in EconPapers)
JEL-codes: H24 H25 J22 J24 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:itaxpf:v:30:y:2023:i:6:d:10.1007_s10797-023-09780-2

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DOI: 10.1007/s10797-023-09780-2

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