Recent working papers:
Explaining Take-up Behavior – the Role of Benefit Generosity and Hysteresis (with Olof Rosenqvist)
Abstract: Take-up of social benefits is a central issue in poverty alleviation and fiscal evaluations of policy reforms. However, it is difficult to find exogenous variation in the benefit level, and little is therefore known about take-up responses to benefits generosity. We exploit large and plausibly random variation in levels of ”flat-rate parental leave benefits”, which all Swedish parents are entitled to. There are no financial reasons to leave money on the table, but take-up is nevertheless imperfect. Higher benefits substantially increase claiming across the income distribution. We also find surprisingly large hysteresis effects: Subsequent take-up of treated low-income earners increases.
Firm-level Responses to a Canceled Dividend Tax Increase (with Johan Holmberg)
Abstract: An increase in the dividend tax on shares of Swedish closely-held corporations, scheduled for January 1, 2018, was canceled at short notice. In a difference-in-difference setting, we examine how firms reacted to the canceled reform. We find that dividends payments increased in 2016 and 2017 and declined sharply in 2018, especially for cash-rich firms. However, cash holdings recovered quickly in 2018 and 2019, and the excessive dividend payouts did not affect investments. Paradoxically, the discontinued reform implied an additional tax burden for those engaged in intertemporal tax arbitrage.
Earnings Responses to Even Higher Taxes (with Dingquan Miao and Martin Söderström)
Published in The Economic Journal
Abstract: We exploit a recent Swedish tax reform, implying higher marginal tax rates for the top 5% of the earnings distribution, to learn about earnings responses to higher taxes. Using a simple and graphical cross sectional method, we estimate an earnings elasticity of 0.16, evaluated four years after the reform. Our analysis indicates that the response is driven by adjustments in wage rates, and not by changes to hours, job switches, or income shifting. We interpret the magnitude and preciseness of the response using a realistically calibrated simulation model in which people face uncertain marginal tax rates due to earnings dynamics.
Taxing Dividends in a Dual Income Tax System. The Nordic Experience with the Income Splitting Rules
Forthcoming in a special issue of the Nordic Tax Journal: Taxing Dividends in the Nordic Countries -- Challenges and Opportunities
Abstract: In a dual income tax (DIT) system, labor income is taxed progressively, while capital income is subject to a lower proportional tax. DIT systems were introduced in Sweden, Norway, and Finland in the early 1990s. In the absence of rules restricting capital income distributions, owners of closely held corporations would easily be able to circumvent the progressive tax on earned income by withdrawing an appropriate amount of dividends instead of wages. The Nordic countries adopted very different income splitting models, with immediate implications for the tax treatment of dividends. In this article I first review the principles of the income splitting rules of Sweden, Norway, and Finland. I then discuss some of the tradeoffs involved in the design of such rules.
Publications in peer-reviewed journals
Lindahl, Erica, Rosenqvist, Olof and Håkan Selin (2023) "Gender-Targeted Transfers by Default? Evidence from a Child Allowance Reform in Sweden", Labour Economics, Volume 83.
Escobar, Sebastian, Ohlsson, Henry and Håkan Selin (2023) "Giving to the Children or the Taxman? Lessons from a Swedish Inheritance Tax Loophole" European Economic Review, Volume 153.
Edin, Per-Anders and Håkan Selin (2022) "Financial Risk-taking and the Gender Wage Gap", Labour Economics, Volume 75.
Bastani, Spencer, Moberg, Ylva and Håkan Selin (2021) "The Anatomy of the Extensive Margin Labor Supply Response", Scandinavian Journal of Economics, Volume 123.
Selin, Håkan and Laurent Simula (2020) "Income Shifting as Income Creation?" Journal of Public Economics, Volume 182.
Selin, Håkan (2017) “What Happens to the Husband's Retirement Decision when the Wife's Retirement Incentives Change?" International Tax and Public Finance, Volume 24, Issue 3, 432-458.
Edmark, Karin, Mörk, Eva, Liang Che-Yuan and Håkan Selin (2016), "The Swedish Earned Income Tax Credit: Did It Increase Employment?" FinanzArchiv / Public Finance Analysis, Volume 72, Issue 4, 475-503.
Jäntti, Markus, Pirttilä, Jukka and Håkan Selin (2015) “Estimating Labour Supply Elasticities Based on Cross-Country Micro Data: A Bridge between Micro and Macro Estimates?” Journal of Public Economics, Volume 127, 87-99.
Bastani, Spencer and Håkan Selin (2014) “Bunching and Non-Bunching at Kink Points of the Swedish Tax Schedule.” Journal of Public Economics, Volume 109, 36-49.
Selin, Håkan (2014) “The Rise in Female Employment and the Role of Tax Incentives. An Empirical Analysis of the Swedish Individual Tax Reform of 1971” International Tax and Public Finance, Volume 21, Issue 5, 894-922.
Selin, Håkan (2012) “Marginal Tax Rates and Tax-Favoured Pension Savings of the Self-Employed. Evidence from Sweden” Scandinavian Journal of Economics, Volume 114, Issue 1, 79–100.
Pirttilä, Jukka and Håkan Selin (2011), “Income Shifting Within a Dual Income Tax System. Evidence from the Finnish Tax Reform of 1993” Scandinavian Journal of Economics, Volume 113, Issue 1, 120-144.
Blomquist, Sören and Håkan Selin (2010) “Hourly Wage Rate and Taxable Labor Income Responsiveness to Changes in Marginal Tax Rates” Journal of Public Economics, Volume 94, issues 11-12, 878-889.