Firm Inequality and The Employment Tax: A Quantitative Study of Northern Sweden

• Main Author: Hedenstierna Jonson, August
• Format: Other/Unknown Material
• Language: English
• Published: Lunds universitet/Ekonomisk-historiska institutionen 2024
• Subjects: Northern Sweden; Firm Inequality; Firm Concentration; Gini Index; Theil’s T Index; Difference-in-differences; Business and Economics
• Online Access: http://lup.lub.lu.se/student-papers/record/9163903

This paper quantitatively studies how firm inequality (society-wide firm concentration) in Northern Sweden was impacted by a 2002 deduction to the employment tax. The paper constructs Gini and Theil’s T indices as measurements of firm inequality for 29 Swedish municipalities for the years 1998-2007, where the net sales and number of employees are used as two measurements of firm size. This results in four different indices used as panel data in a difference-in-differences approach to establish causality. Through econometric evaluation of all four tests, no evidence is found of the employment tax deduction having an impact on firm inequality.