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Tax policy and entrepreneurship: Empirical evidence from Sweden

Hansson, Åsa LU (2012) In Small Business Economics 38. p.495-513
Abstract
This paper examines the relationship between income taxes and the decision to become self-employed using data from Sweden. By making it possible to track a large number of individuals over extended time periods and across a number of tax rate changes while controlling for important additional determinants, available tax-return information from Sweden allows for statistical estimation of the influence income taxes have on the probability of becoming self-employed. The changing tax rate structure combined with the fact that the Swedish tax system does not provide additional tax benefits to small business-entrepreneurs compared with those who work as employees, provides a powerful setting through which to examine the tax-rate structure’s... (More)
This paper examines the relationship between income taxes and the decision to become self-employed using data from Sweden. By making it possible to track a large number of individuals over extended time periods and across a number of tax rate changes while controlling for important additional determinants, available tax-return information from Sweden allows for statistical estimation of the influence income taxes have on the probability of becoming self-employed. The changing tax rate structure combined with the fact that the Swedish tax system does not provide additional tax benefits to small business-entrepreneurs compared with those who work as employees, provides a powerful setting through which to examine the tax-rate structure’s influence on individuals’ choice to become self-employed. Contrary to many earlier studies based on US data, this paper finds that both average and marginal taxes have a negative impact on the decision to become self-employed. (Less)
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
tax policy, Firm start-ups, self-employment, income taxes
in
Small Business Economics
volume
38
pages
495 - 513
publisher
Springer
external identifiers
  • wos:000301461300009
  • scopus:84858079667
ISSN
0921-898X
DOI
10.1007/s11187-010-9282-7
language
English
LU publication?
yes
id
7d20e3a2-4edc-4eda-9d59-55b0000264ee (old id 1591278)
date added to LUP
2010-04-29 12:55:01
date last changed
2017-11-12 03:11:40
@article{7d20e3a2-4edc-4eda-9d59-55b0000264ee,
  abstract     = {This paper examines the relationship between income taxes and the decision to become self-employed using data from Sweden. By making it possible to track a large number of individuals over extended time periods and across a number of tax rate changes while controlling for important additional determinants, available tax-return information from Sweden allows for statistical estimation of the influence income taxes have on the probability of becoming self-employed. The changing tax rate structure combined with the fact that the Swedish tax system does not provide additional tax benefits to small business-entrepreneurs compared with those who work as employees, provides a powerful setting through which to examine the tax-rate structure’s influence on individuals’ choice to become self-employed. Contrary to many earlier studies based on US data, this paper finds that both average and marginal taxes have a negative impact on the decision to become self-employed.},
  author       = {Hansson, Åsa},
  issn         = {0921-898X},
  keyword      = {tax policy,Firm start-ups,self-employment,income taxes},
  language     = {eng},
  pages        = {495--513},
  publisher    = {Springer},
  series       = {Small Business Economics},
  title        = {Tax policy and entrepreneurship: Empirical evidence from Sweden},
  url          = {http://dx.doi.org/10.1007/s11187-010-9282-7},
  volume       = {38},
  year         = {2012},
}