Structural Differencing Estimation with Nonlinear Budget Sets

نویسندگان

  • Che-Yuan Liang
  • Mikael Elinder
  • Lennart Flood
  • Eva Mörk
  • Håkan Selin
چکیده

I develop a reform evaluation method for evaluating labor supply in nonlinear budget sets which is both structural and quasi-experimental. The model only requires preferences to be convex on the budget frontier and results in a simple three-dimensional labor supply function. The estimation exploits only the between-individual variation provided by tax reforms. I apply the method to evaluate earned income effects of the Swedish earned income tax credit introduced between 2007 and 2010. I find a positive extensive margin effect for married individuals but also negative intensive margin effects due to the absence of a phaseout region.

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تاریخ انتشار 2013