Voluntary Pension Savings and Tax Incentives: Evidence from Finland

Jarkko Harju

FinanzArchiv: Public Finance Analysis, 2013, vol. 69, issue 1, 3-29

Abstract: This paper studies empirically savers' behavioral responses to the Finnish tax reform of 2005 by using comprehensive panel data. The tax schedule of voluntary pension savings changed from progressive to proportional, changing the saving incentives in different subgroups. The results indicate that the reform altered saving behavior by reducing voluntary pension saving coverage among high income earners by 4 percentage points and increasing it among low income earners by 2 percentage points. The reform also reduced annual saving contributions among high income earners by over 20%. The estimated effects result entirely from the changed saving behavior of men.

Keywords: voluntary pension savings; tax reform; tax incentives (search for similar items in EconPapers)
JEL-codes: H24 H31 (search for similar items in EconPapers)
Date: 2013
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Working Paper: Voluntary pension savings and tax incentives: Evidence from Finland (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:mhr:finarc:urn:sici:0015-2218(201303)69:1_3:vpsati_2.0.tx_2-5

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DOI: 10.1628/001522108X663451

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