Do regional payroll tax reductions boost employment?
Using a Difference-in-Differences approach, we evaluate the effects of a 10 percentage point reduction in the payroll tax introduced in 2002 in northern Sweden. We find no employment effects among firms existing both before and after the reform, whereas the average wage bill per employee increases b...
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ftrepec:oai:RePEc:eee:labeco:v:16:y:2009:i:5:p:480-489 2024-04-14T08:16:40+00:00 Do regional payroll tax reductions boost employment? Bennmarker, Helge Mellander, Erik Öckert, Björn http://www.sciencedirect.com/science/article/pii/S0927-5371(09)00041-4 unknown http://www.sciencedirect.com/science/article/pii/S0927-5371(09)00041-4 article ftrepec 2024-03-19T10:30:42Z Using a Difference-in-Differences approach, we evaluate the effects of a 10 percentage point reduction in the payroll tax introduced in 2002 in northern Sweden. We find no employment effects among firms existing both before and after the reform, whereas the average wage bill per employee increases by about 0.25% per percentage point reduction in the tax rate. Extending the analysis to include entry and exit of firms, we find evidence of positive effects on the number of firms and a tendency to positive employment effects. Moreover, the wage incidence estimates become insignificant when we account for entry and exit of firms. Labour tax Labour demand Incidence Firm entry/exit Difference-in-Differences Article in Journal/Newspaper Northern Sweden RePEc (Research Papers in Economics) |
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Open Polar |
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RePEc (Research Papers in Economics) |
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description |
Using a Difference-in-Differences approach, we evaluate the effects of a 10 percentage point reduction in the payroll tax introduced in 2002 in northern Sweden. We find no employment effects among firms existing both before and after the reform, whereas the average wage bill per employee increases by about 0.25% per percentage point reduction in the tax rate. Extending the analysis to include entry and exit of firms, we find evidence of positive effects on the number of firms and a tendency to positive employment effects. Moreover, the wage incidence estimates become insignificant when we account for entry and exit of firms. Labour tax Labour demand Incidence Firm entry/exit Difference-in-Differences |
format |
Article in Journal/Newspaper |
author |
Bennmarker, Helge Mellander, Erik Öckert, Björn |
spellingShingle |
Bennmarker, Helge Mellander, Erik Öckert, Björn Do regional payroll tax reductions boost employment? |
author_facet |
Bennmarker, Helge Mellander, Erik Öckert, Björn |
author_sort |
Bennmarker, Helge |
title |
Do regional payroll tax reductions boost employment? |
title_short |
Do regional payroll tax reductions boost employment? |
title_full |
Do regional payroll tax reductions boost employment? |
title_fullStr |
Do regional payroll tax reductions boost employment? |
title_full_unstemmed |
Do regional payroll tax reductions boost employment? |
title_sort |
do regional payroll tax reductions boost employment? |
url |
http://www.sciencedirect.com/science/article/pii/S0927-5371(09)00041-4 |
genre |
Northern Sweden |
genre_facet |
Northern Sweden |
op_relation |
http://www.sciencedirect.com/science/article/pii/S0927-5371(09)00041-4 |
_version_ |
1796315381219983360 |