Earned income tax credits, unemployment benefits and wages: empirical evidence from Sweden

Table 4 Estimated wage equations when the replacement rate and progressivity variable are instrumented by reform variables based on estimated Mincer wages

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)
Inflation				.843***	.745***	.736***	.743***	.761***	.675***
				(.048)	(.031)	(.031)	(.032)	(.031)	(.042)
Change in replacement rate	.107***		.201***	.215***	.246***	.241***	.241***	.239***	.181***
	(.010)		(.020)	(.024)	(.019)	(.019)	(.019)	(.019)	(.019)
Change in progressivity variable		-.330***	-.401***	.442***	.540***	.485***	.504***	.494***	.429***
		(.064)	(.074)	(.126)	(.155)	(.155)	(.161)	(.160)	(.155)
Change in unemployment rate					-.214***	-.189***	-.204***	-.165***	-.301***
					(.059)	(.059)	(.064)	(.060)	(.064)
Dummy for earlier unemployment					.003***	.003***	.003***	.003***	.007***
					(.001)	(.001)	(.001)	(.001)	(.001)
Male				.044	.073	.061	.064	.095*	-.160***
				(.051)	(.053)	(.052)	(.053)	(.052)	(.059)
Age				-.096***	-.096***	-.247***	-.235***	-.249***	-.385***
				(.002)	(.002)	(.015)	(.017)	(.015)	(.017)
Age squared						.176***	.164***	.180***	.311***
						(.018)	(.020)	(.018)	(.021)
Payroll dummy 2007							-.001
							(.002)
Payroll dummy 2009							.004**
							(.002)
Controls				Yes	Yes	Yes	Yes	Yes	Yes
Entrepreneurs excluded								Yes
Full-time employed									Yes
N	426 819	426 819	426 819	426 816	426 816	426 816	426 816	417 633	319 510

Note: Dependent variable: first difference of log nominal wage. Sample period: 2006-2009. IV estimations (2SLS). Where indicated, the controls comprise educational level and type, region of birth and civil status. The constant is not reported. Robust standard errors are reported within parenthesis. ^***: significant at the 1 per cent level; ^**: significant at the 5 per cent level; ^*: significant at the 10 per cent level. The coefficients and standard errors for Male and Age have been multiplied by 100, and the coefficient and standard errors for Age squared by 100².