The Ability Gradient in Bunching

Daniel Waldenström and Spencer Bastani

No 14599, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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: 2020-04
New Economics Papers: this item is included in nep-lma
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: The Ability Gradient in Bunching (2020)
Working Paper: The Ability Gradient in Bunching (2020)
Working Paper: The Ability Gradient in Bunching (2020)
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