Effects of Taxes on Youth Self-Employment and Income

Johan Egebark

No 1117, Working Paper Series from Research Institute of Industrial Economics

Abstract: I study the link between taxes and youth self-employment. I make use of a Swedish reform, implemented in 2007–09, which suddenly made the payroll tax and the self-employment tax vary by age. The results suggest that youth self-employment is insensitive to tax reductions, both in the short run and in the somewhat longer run. I also study the effect of the tax reductions on income. For those that are defined as self-employed, I find positive effects on income from self-employment, and negative effects on income from wage employment. This finding suggests that the lower taxes caused the self-employed to reallocate time from employment to self-employment.

Keywords: Youth unemployment; Self-employment tax; Tax subsidy; Self-employment (search for similar items in EconPapers)
JEL-codes: H25 H32 J23 J38 J68 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2016-03-10
New Economics Papers: this item is included in nep-eur, nep-lma, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Effects of taxes on youth self-employment and income (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:1117

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