%0 Report
        %A Arulampalam, Wiji
%A Papini, Andrea
        %T Tax Progressivity and Self-Employment Dynamics
        %D 2021
        %8 2021 May
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 14363
        %U https://www.iza.org/publications/dp14363
        %X Analysis of the relationship between taxes and self-employment should account for the interplay between responses in self-employment and wage employment. To this end, we estimate a two-state multi-spell duration model which accounts for both observed and unobserved heterogeneity using a large longitudinal administrative dataset for Norway for 1993 to 2011. Our findings confirm theoretical predictions, and are robust to various changes to definitions and sample selections. A policy experiment simulating a flatter tax schedule in the year 2000 is found to encourage self-employment, delivering a net increase of predicted inflow into self-employment from 2.8% to 5.3%.
        %K self-employment
%K income tax
%K tax progressivity
%K duration analysis