Data and Code for: Labor Supply Responses and Adjustment Frictions: A Tax-Free Year in Iceland

Principal Investigator(s):  View help for Principal Investigator(s) Josef Sigurdsson, Stockholm University

Version:  View help for Version V1

Name File Type Size Last Modified
  Individual_Data 11/19/2024 03:33:AM
  Open_Access_Data 11/19/2024 03:34:AM
README.pdf application/pdf 124.3 KB 03/12/2025 06:52:AM
big_master.do text/plain 974 bytes 02/28/2025 01:16:AM

Project Citation: 

Sigurdsson, Josef. Data and Code for:  Labor Supply Responses and Adjustment Frictions: A Tax-Free Year in Iceland. Nashville, TN: American Economic Association [publisher], 2025. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2025-10-03. https://doi.org/10.3886/E211322V1

Project Description

Summary:  View help for Summary This folder contains code and data for the paper "Labor Supply Responses and Adjustment Frictions: A Tax-Free Year in Iceland".

Abstract: Labor income earned in Iceland in 1987 went untaxed. I use this episode to study labor supply responses to temporary wage changes. Using a population-wide dataset of earnings and working time and two identification strategies, I estimate intensive and extensive margin Frisch elasticities of 0.4 and 0.09, respectively. Workers with the ability to adjust drive these average responses: extensive margin by young and close-to-retirement cohorts and intensive margin responses by workers in temporally flexible jobs, though secondary jobs contribute to one-tenth of the response. The results suggest that adjustment frictions may similarly explain differences in elasticities within and across countries.
Funding Sources:  View help for Funding Sources Carl Mannerfelt Foundation

Scope of Project

Subject Terms:  View help for Subject Terms Economics
JEL Classification:  View help for JEL Classification
      E65 Studies of Particular Policy Episodes
      H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
      H31 Fiscal Policies and Behavior of Economic Agents: Household
      J21 Labor Force and Employment, Size, and Structure
      J22 Time Allocation and Labor Supply
Geographic Coverage:  View help for Geographic Coverage Iceland
Time Period(s):  View help for Time Period(s) 1981 – 1990
Universe:  View help for Universe Icelandic population at working age
Data Type(s):  View help for Data Type(s) program source code

Methodology

Data Source:  View help for Data Source Administrative data
Unit(s) of Observation:  View help for Unit(s) of Observation Individual
Geographic Unit:  View help for Geographic Unit Iceland

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Published Versions

V1 [2025-10-03]

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