Bianchi, Marco; Gudmundsson, Björn R; Zoega, Gylfi - C.E.P.R. Discussion Papers - 2000
The move to a pay-as-you-earn income tax system in Iceland in 1987-1988 made income earned in 1987 tax-free. Using a sample of 9,274 individuals for the years 1986, 1987 and 1988, we calculate the labour-supply response of this change and find that total labour supply rose by 6.7% in 1987 over...