Saving behavior and risk taking: Evidence from the Dutch Tax Reform in 2001
Moreover, we use the exogenous variation in marginal tax rates from the Dutch tax reform of 2001. We find that a change in the difference in the marginal tax rate between risky assets and riskless assets has a significant positive impact on the ownership of risky assets and growth funds. A ten percentage point increase of the marginal rate results in a 0.5 percentage point increase of the probability of owning risky assets. The tax rate has no impact on the share of risky assets if we correct for endogeneity and selection.