Kleven, Henrik J.; Waseem, Mazhar - In: The Quarterly Journal of Economics 128 (2013) 2, pp. 669-723
We develop a framework for nonparametrically identifying optimization frictions and structural elasticities using notches--discontinuities in the choice sets of agents--introduced by tax and transfer policies. Notches create excess bunching on the low-tax side and missing mass on the high-tax...