Tax Progressivity and Self-Employment Dynamics

Review of Economics and Statistics ◽

10.1162/rest_a_01046 ◽

2021 ◽

pp. 1-44

Author(s):

Wiji Arulampalam ◽

Andrea Papini

Keyword(s):

Unobserved Heterogeneity ◽

Tax Progressivity ◽

Employment Dynamics ◽

Administrative Dataset ◽

Self Employment ◽

Theoretical Predictions ◽

Wage Employment ◽

Policy Experiment ◽

Year 2000 ◽

The Relationship

Abstract 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 atter tax schedule in the year 2000 is found to encourage self-employment, delivering a net increase of predicted inow into self-employment from 2.8% to 5.3%.

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The Reemergence of Self-Employment: A Comparative Study of Self-Employment Dynamics and Social Inequality

American Journal of Economics and Sociology ◽

10.1111/j.1536-7150.2004.00329.x ◽

2004 ◽

Vol 63 (4) ◽

pp. 954-958

Keyword(s):

Comparative Study ◽

Social Inequality ◽

Employment Dynamics ◽

Self Employment

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Self-Employment Dynamics of Immigrants and Natives: Individual-level Analysis for the Canadian Labour Market

Sustainability ◽

10.3390/su11236671 ◽

2019 ◽

Vol 11 (23) ◽

pp. 6671

Author(s):

Nisar Ahmad ◽

Amjad Naveed ◽

Rayhaneh Esmaeilzadeh ◽

Amber Naz

Keyword(s):

Labour Market ◽

Labour Force ◽

State Dependence ◽

Individual Level ◽

Employment Dynamics ◽

Self Employment ◽

The Government ◽

Core Questions ◽

Government Provision ◽

Labour Market Discrimination

This paper analyses the dynamic transitions of self-employment in four states of the Canadian labour market (paid-employment, self-employment, unemployment, and being out of the labour force) by answering three core questions: (1) What are the determinants of the transitions into and out of the four labour market states? (2) Are the probabilities of transitions between immigrants and natives significantly different, and if so, are they due to entry–exit rate gaps between immigrants and natives? (3) What are the proportions of spurious and structural state dependence in the labour market states of immigrants and natives? Our analysis was based on longitudinal data from Canada’s Survey of Labour and Income Dynamics (SLID) for males aged 25 to 55 for the period 1993 to 2004. Our results revealed that immigrants rather than natives are relatively more likely to be self-employed during the unemployment period. The findings also confirmed that males with positive investment income or wealth tended to be largely self-employed. From a policy perspective, the government provision of financial support towards self-employment positively benefits natives in seeking self-employment opportunities. Government policies to lessen labour market discrimination promotes the self-employment of immigrants.

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