The Norwegian tax holiday: Salience, labor supply responses, and frictions

Jósef Sigurdsson

LABOUR, 2024, vol. 38, issue 2, 278-293

Abstract: An emerging consensus is that the Frisch elasticity of labor supply is small. This may reflect a lack of salience, inelastic preferences, or prevalence of frictions. Studying survey data collected during a tax holiday in Norway, when earnings were untaxed during a transition between tax systems, I report three findings. First, 80 per cent of adults were aware of the tax holiday. Second, one fifth of adults responded by working more. Third, frictions in adjusting working hours or nonworking time appear to be the reason for a majority of nonresponses. The findings support the long‐held notion that labor supply choices are constrained.

Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/labr.12268

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:labour:v:38:y:2024:i:2:p:278-293

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1121-7081

Access Statistics for this article

LABOUR is currently edited by Franco Peracchi

More articles in LABOUR from CEIS Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().