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The Ability Gradient in Bunching

Spencer Bastani () and Daniel Waldenström ()

No 8233, CESifo Working Paper Series from CESifo

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 (search for similar items in EconPapers)
JEL-codes: H21 H24 J22 J24 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-gen and nep-lma
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Related works:
Working Paper: The Ability Gradient in Bunching (2020) Downloads
Working Paper: The Ability Gradient in Bunching (2020) Downloads
Working Paper: The Ability Gradient in Bunching (2020) Downloads
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