The tax system incidence on unemployment
Subtitle: a country-specific analysis for the oecd economies
By: by José Ramón Garcia̕ Hector Sala
Contributors: Sala, Hector
Series: Discussion paper -- no. 2226; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) -- no. 2226
Publisher: IZA
Published: 2006
Place of publication: Bonn, Germany
Language: eng
Format: [electronic resource] :
Subjects: Taxation; Case studies; Unemployment
Description: "This paper provides a detailed analysis on the incidence of the tax structure on the labor market. To do so it goes beyond the traditional examination of the 'level' effect of the fiscal wedge and considers a 'composition' effect defined as a payroll tax bias (PTB): the proportion of payroll taxes paid by employees with respect to the one paid by firms. We develop a right-to-manage model encompassing different wage bargaining systems and the incidence of different type of taxes. Controlling for demand-side and supply-side determinants of unemployment, we show that the PTB plays a significant role in explaining unemployment in the continental European countries, but not in the Nordic nor the Anglo-Saxon ones. We also show that there is no relationship between the incidence of the PTB and unemployment persistence, even though there is a positive one with respect to the level of the fiscal wedge"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Title from PDF file as viewed on 8/2/2006.

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