Niklas Bengtsson

Lifetime versus Annual Tax-and-Transfer Progressivity : Sweden, 1968-2009

In this paper, we analyze the evolution of tax-and-transfer progressivity in Sweden over both annual and lifetime horizons. Using a rich micro panel covering the period 1968–2009, we calculate tax rates over a cohorts entire working life cycle. Our main finding is that taxes are considerably less progressive over the lifetime than in any single year. Social insurance transfers to transitory low-income earners account for most of this result. We offer a number of robustness checks of the measurement of lifetime incomes and progressivity, but none of them changes our overall findings.

Replacing Trust with Control: A Field Test of Motivation Crowd Out Theory

Results in behavioural economics suggest that material incentives can crowd out motivation if agents are mission-oriented rather than self-interested. We test this prediction on a sample of non-profit organisations in Sweden. Traditionally, contracts with the main principal (the Swedish foreign aid agency) have been based on trust and self-regulation. We designed a randomised policy experiment, effectively replacing the trust-based contract with an increased level of monitoring from the principal. Overall, using both self-reported and observed measures of outreach, we find that the intervention increased outreach, reduced expenditures and reduced the number of financial irregularities.

The Marginal Propensity to Earn and Consume Out of Unearned Income: Evidence Using an Unusually Large Cash Grant Reform

We use a rapid introduction of an unconditional cash grant (child support) in South Africa to estimate the marginal propensity to consume and earn out of unearned income. We find that the marginal propensity to earn is about –0.3 and the marginal propensity to consume about 0.7. Nothing of the grant appears to be saved; if anything, households dissave against future grant payments. The marginal propensities estimated here are similar to those reported in comparable papers using US data. However, they stand in contrast to some results on conditional cash transfers in other developing countries.