Does a Wealth Tax Improve Equality of Opportunity? Evidence from Norway
IMF Working Papers, March 19, 2021
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- Does a Wealth Tax Improve Equality of Opportunity? Evidence from Norway
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Bibliographic details
- Authors: Kristoffer Berg, Shafik Hebous
- Published: March 19, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513574417.001
Research question and scope
- Does parental wealth inequality impact next generation labor income inequality?
- Does a tax on parental wealth affect the labor income distribution of the next generation?
- Focus: effects on wages rather than capital income.
- Data: detailed intergenerational data from Norway.
Key empirical findings
- A net wealth of NOK 1 million increases wages of the children by NOK 14,000.
- Children of wealthy parents have a higher labor income mobility.
- The estimated hypothetical wage distribution without the wealth tax is more unequal.
- Suggestive evidence indicates parental wealth is associated with higher labor risk taking.
Analytical emphasis
- Estimates concentrate on labor income (wages) rather than capital income.
- Counterfactual analysis compares observed wage distribution with a hypothetical distribution without the wealth tax.
Subjects and keywords (as listed)
- Subjects: Capital income, Economic sectors, Financial crises, Income, Income distribution, Labor, National accounts, Taxes, Wages, Wealth tax
- Keywords: Capital income, counterfactual income distribution, Equality of Opportunity, Income, Income distribution, Income Mobility, Inequality, labor income dispersion, Parental Wealth, Redistribution, Wages, Wealth Tax, wealth tax tax rate
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- Working Paper