<p>In this paper I study how the repeal of the Swedish wealth tax (1 of January 2007) has affected people´s labour supply behaviour. This particular issue is relevant because it may help us understand some of the effects of the earnings tax changes that have taken place in Sweden. Accoring to standard economic theory a repealed wealth tax is similar to an income effect for the persons who previously paid the tax. That means that they theoretically will want to consume more leisure, that is decrease their labour supply. The method I am using to test this hypothesis is a difference-in-difference approach where the treatment group consists of persons who previously paid the tax and the control group of comparable persons who did not pay the tax. The data I am using is taken from a Swedish database called LINDA, compiled by the Swedish Central Agency for Statistics (SCB). My main result in this paper is that the repealed wealth tax does not seem to have had any influnece on the labour supply behavior of the persons who previously paid the tax.</p>

In this paper I study how the repeal of the Swedish wealth tax (1 of January 2007) has affected people´s labour supply behaviour. This particular issue is relevant because it may help us understand some of the effects of the earnings tax changes that have taken place in Sweden. Accoring to standard economic theory a repealed wealth tax is similar to an income effect for the persons who previously paid the tax. That means that they theoretically will want to consume more leisure, that is decrease their labour supply. The method I am using to test this hypothesis is a difference-in-difference approach where the treatment group consists of persons who previously paid the tax and the control group of comparable persons who did not pay the tax. The data I am using is taken from a Swedish database called LINDA, compiled by the Swedish Central Agency for Statistics (SCB). My main result in this paper is that the repealed wealth tax does not seem to have had any influnece on the labour supply behavior of the persons who previously paid the tax.