Eva Gavrilova: The Anatomy of Payroll Tax Incidence: Evidence from Norway.

Velkommen til webinar med førsteamanuensis Eva Gavrilova, NHH. 

Tittel: The Anatomy of Payroll Tax Incidence: Evidence from Norway.

ZOOM: https://uib.zoom.us/j/68790873336?pwd=YlhTVDBjZ3FaVDdJeWZCQVRIN3ZOQT09 

Abstract:
Tax incidence is widely believed to occur at the market level, and to be determined by demand and supply side forces. However, Saez et al. (2012,2019) find that incidence can differ between market comparable workers, even in the very long run. In this paper, we analyze the effects of a 2007 reform in the payroll tax in Norway to explore the anatomy of payroll-tax incidence. We use panel data from 2002 to 2013 on employer-employee matches. We apply an event-study methodology. We find that a large part of the incidence is shifted to workers who remain at the same job, but the effect only becomes significant 6 years after treatment. Shifting mainly seems to occur through basic wages, as we see no significant difference when we look at broader wage concepts that include overtime payments and bonuses. For people that switch jobs, we find no significant effect on incidence. We develop and apply a novel causal forest machine learning algorithm, that allows us to dissect this heterogeneity using worker, and firm-level covariates. We find that the patterns of incidence are most significantly explained by personal characteristics like pre-reform worker income, marital status and education. Firm-level variables hold secondary importance.