Code for: "Labor Supply Responses to Learning the Tax and Benefit Schedule"

Principal Investigator(s): View help for Principal Investigator(s) Andreas R. Kostøl, WP Carey School of Business, Arizona State University, Statistics Norway, IZA; Andreas S. Myhre, The Norwegian Welfare Administration, Statistics Norway

Version: View help for Version V1

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Project Citation:

Kostøl, Andreas R., and Myhre, Andreas S. Code for: “Labor Supply Responses to Learning the Tax and Benefit Schedule.” Nashville, TN: American Economic Association [publisher], 2021. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2021-10-19. https://doi.org/10.3886/E144121V1

Project Description

Summary: Despite the implications for policy, empirical evidence on the relative importance of factors that shape labor supply responses is missing. This paper helps fill this gap and quantifies the role of information frictions vs. other frictions by combining notches in the Norwegian welfare system and quasi-experimental variation in access to information about the slope and location of kinks. While we estimate a frictionless elasticity of 0.3, overall frictions attenuate this elasticity by about 70 percent. We find the information letter increased the earnings elasticity from 0.06 to 0.15, implying that information frictions account for at least 30% of total attenuation.

Funding Sources: The Norwegian Welfare Administration (FARVE); President of ASU's Strategic Initiative Fund

Scope of Project

Subject Terms: labor

JEL Classification:
      H20 Taxation, Subsidies, and Revenue: General
      H31 Fiscal Policies and Behavior of Economic Agents: Household
      H55 Social Security and Public Pensions
      J26 Retirement; Retirement Policies

Geographic Coverage: Norway

Time Period(s): 1993 – 2016

Collection Date(s): 2015 – 2016

Universe: All disability insurance recipients registered i) over the period 1993 to 2014 and ii) at January 1st, 2015. We then follow their income and work history from 1993 to 2016.

Data Type(s): administrative records data

Collection Notes: The data employed in the analysis are drawn from Norwegian administrative registers. Researchers can gain access to the data by submitting a written application to the data owners. Applications must be certified by The Norwegian Data Inspectorate in order to ensure that data are processed in a manner that protects the personal integrity of individuals surveyed. Conditional on this approval, Statistics Norway will then determine which data one may obtain in accordance with the research plan. Inquiries about access to data from Statistics Norway should be addressed to: mikrodata@ssb.no. More information is available at https://www.ssb.no/en/omssb/tjenester-og-verktoy/data-til-forskning

Methodology

Data Source: We use the administrative data source called "a-ordningen" that covers monthly income from matched employer-employee data from 2015 to 2016. We also use tax register files to capture annual income and labor earnings over the period 1993 to 2015. Population panel data fra Statistics Norway provides us with information on education (NUDB), gender and age (Befolkningsfiler).

There were two data sources used from the Norwegian Welfare Administration (NAV). The first covers all disability insurance recipients in 2015. The second provides us with records on whether a person received the information letter.

Data description below was sent to Statistics Norway and NAV and includes internal references to databases in Statistics Norway.

Population registers:
Reg. nr. 556, Befolkningsregister (BeReg)

$BESTAT/innvandr/ (alle understammer)

$BESTAT/familie/ (alle understammer)

$BESTAT/folkem/ (alle understammer)

Utdanningsstatistikk: Reg. nr. 553, Nasjonal utdanningsdatabase (NUDB)

$UTD/utdnivaa/

Linked employer-employee data:

(AA-registeret/arbeidsmarkedsstatistikk/Lønns- og inntektsstatistikk/A-ordningen)

Reg. nr. 255, Registerbasert arbeidsmarkedsstatistikk

$SFP/sfp_aars/atmlto/

$SFP/sfp_aars/atulto/

$SFP/sfp_aars/ltouat/

$SFP/sfp_aars/pop_salv_1986_2002/

$SOFA/arkiv/ (alle understammer)

Income statistics:

Reg. nr. 330, Inntektsstatistikk for husholdninger

$INNTREG/sbinntreg/arkiv/person/

$SKATT/sbperson/arkiv/individ/

Reg. nr. 34, Datasett for lønnsstatistikk

$LONN/3972/arkiv/forskning/

Firms and establishments:
Reg. nr. 30, Det sentrale Virksomhets- og foretaksregister (VoF)

$DSB/sbbofsit/arkiv/aarsfil

$DSB/sbbofsit/arkiv/sitfil

$DSB/sbbofsit/arkiv/konsernfil

Social insurance program participation:

FD-Trygd: Reg. nr. 506, FD-Trygd

$TRYGDFOB/arbsok/arkiv/

$TRYGDFOB/attfoer/arkiv/

$TRYGDFOB/avslag/arkiv/

$TRYGDFOB/fufor/arkiv/

$TRYGDFOB/gr1/arkiv/

$TRYGDFOB/pensj

$TRYGDFOB/inntekt/arkiv/

$TRYGDFOB/rehab/arkiv/

$TRYGDFOB/soshj/arkiv/

$TRYGDFOB/tu/arkiv/

External data from NAV
1. Recipients of DI benefits

Potential name of source: PSYS

Period: 01.01.2009 – 31.12.2016

2. Use of information resources at NAV

Potential name of source: GSAK, MODIA, GOSYS

Period: 01.01.2009 (or later) – 31.12.2016

Unit(s) of Observation: Disability insurance recipients

Geographic Unit: Country level

Related Publications

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Published Versions

V1 [2021-10-19]

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Dublin Core

DDI 2.5

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