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Ole Agersnap

PhD Candidate in Economics

Princeton University

+1 (609) 510-6709

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I am a PhD Candidate in Economics at Princeton University. I specialize in public economics, and my research focuses on taxation, transfers, migration and spatial topics.


The Tax Elasticity of Capital Gains and Revenue-Maximizing Rates
With Owen Zidar
American Economic Review: Insights, 3 (4), 399-416, 2021.

This paper uses a direct-projections approach to estimate the effect of capital gains taxation on realizations at the state level in the U.S., and then develops a framework for determining revenue-maximizing rates at the federal level. We find that the elasticity of revenues with respect to the tax rate over a ten-year period is -0.5 to -0.3, indicating that capital gains tax cuts do not pay for themselves, and that a 5 percentage point rate increase would yield $18 to $30 billion in annual federal tax revenue. Our long-run estimates yield revenue-maximizing capital gains tax rates of 38 to 47 percent.

Press: The Economist, MarketWatch 

The Welfare Magnet Hypothesis: Evidence from an Immigrant Welfare Scheme in Denmark
With Amalie Jensen and Henrik Kleven
American Economic Review: Insights, 2 (4), 527-42, 2020.

We study the effects of welfare generosity on international migration using reforms of immigrant welfare benefits in Denmark. The first reform, implemented in 2002, lowered benefits for non-EU immigrants by about 50%, with no changes for natives or EU immigrants. The policy was later repealed and re-introduced. Based on a quasi-experimental research design, we find sizeable effects: the benefit reduction reduced the net flow of immigrants by about 5,000 people per year, and the subsequent repeal of the policy reversed the effect almost exactly. The implied elasticity of migration with respect to benefits equals 1.3. This represents some of the first causal evidence on the welfare magnet hypothesis.

Online Appendix

Press: AEA Chart of the WeekFrankfurter Allgemeine (German), Information (Danish), Heute (German)

Working Papers

Wealth Effects on Labor Supply: Evidence From a Swedish Tax Reform

With Oscar Erixson

Last updated: November 2019.

We exploit a Swedish tax reform to obtain quasi-experimental, tax-induced variation in wealth which allows us to identify the effect of wealth on labor supply. The reform that we study abolished the inheritance tax in Sweden; the random timing of death around the reform leads to exogenous variation in the net inheritance received by heirs. Using register data covering the full Swedish population of children heirs, we find that a 1 SEK shock to wealth reduces annual earnings in the near term by about 0.016 SEK – a magnitude which is in line with previous estimates of wealth effects – though the estimate is somewhat imprecise and sensitive to removing outliers. To our knowledge, ours is the first study to demonstrate effects on labor supply from plausibly random, tax-induced variation in wealth.

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