Jobbskatteavdraget : Ett incitament till ökat arbetskraftsdeltagande?

Sweden has for many years had problems with high unemployment rates and low participation in the workforce, this paper investigates the relationship between taxes on income and labor force participation. The thesis is delimited to deal with the extensive margin, the number of people entering the labor force. A review of jobbskatteavdragets structure and purpose is carried out, which also focuses on how individuals are affected by inactivity. Based on theory and previous empirical studies, the authors conclude that in-work benefits affect labor supply in terms of real wage increases and more individuals choose to participate. This is reinforced by the empirical study which indicates that jobbskatteavdraget has an effect on employment but also an effect on workforce participation. However the size of this effect is hard to measure and isolate from other reforms and exogenous variables.Validerat; 20130617 (global_studentproject_submitter