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 cohort’s 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.