Tax-bunching, Income Switching and Self-employment
Since Feldstein (1995, 1999) the behavioral response of taxable income to changes in marginal tax rates has been seen the central parameter in the formulation of tax and transfer policies. A large empirical literature has therefore focused on estimating the taxable income elasticity and many di¤erent methods have been suggested (see Saez et al. (2010) for a critical review). In a recent contribution to this literature, Saez (2010) shows that the compensated elasticity of reported taxable income can be estimated directly from the amount of bunching around the tax cutoffs.
and you can read the Working paper Tax Bunching, Income Shifting and Self-empoyment, Bertel Schjerning & Daniel le Maire here