Effects of Payroll Tax Cuts for Young Workers PDF Download
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Author: Per Skedinger
Publisher:
ISBN:
Category :
Languages : en
Pages : 47
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Book Description
In response to high and enduring youth unemployment, large payroll tax cuts for young workers were implemented in two Swedish reforms in 2007 and 2009. This paper analyses the effects of the reforms on worker outcomes and firm performance in the retail industry, an important employer of young workers. In general, the estimated effects on job accessions, separations, hours and wages, are small.For workers close to the minimum wage the estimates suggest larger, but still modest, effects on the probability of job accession. There is also some evidence on increasing profits in a subsample of firms that employed relatively many young workers before the first reform, with estimated effects commensurate with small behavioural effects of the payroll tax cuts. The conclusion is that reducing payroll taxes is a costly means of improving employment prospects for the young.
Author: Per Skedinger
Publisher:
ISBN:
Category :
Languages : en
Pages : 47
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Book Description
In response to high and enduring youth unemployment, large payroll tax cuts for young workers were implemented in two Swedish reforms in 2007 and 2009. This paper analyses the effects of the reforms on worker outcomes and firm performance in the retail industry, an important employer of young workers. In general, the estimated effects on job accessions, separations, hours and wages, are small.For workers close to the minimum wage the estimates suggest larger, but still modest, effects on the probability of job accession. There is also some evidence on increasing profits in a subsample of firms that employed relatively many young workers before the first reform, with estimated effects commensurate with small behavioural effects of the payroll tax cuts. The conclusion is that reducing payroll taxes is a costly means of improving employment prospects for the young.
Author: Emmanuel Saez
Publisher:
ISBN:
Category : Employee selection
Languages : en
Pages : 90
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Book Description
This paper uses administrative data to analyze a large and long-lasting employer payroll tax rate cut from 31% down to 15% for young workers (aged 26 or less) in Sweden. We find a zero effect on net-of-tax wages of young treated workers relative to slightly older untreated workers, even in the medium run (after six years). Simple graphical cohort analysis shows compelling positive effects on the employment rate of the treated young workers, of about 2-3 percentage points, which arise primarily from fewer separations (rather than more hiring). These employment effects are larger in places with initially higher youth unemployment rates. We also analyze the firm-level effects of the tax cut. We sort firms by the size of the tax windfall and trace out graphically the time series of firm outcomes. We proxy a firm's windfall with its share of treated young workers just before the reform. First, heavily treated firms expand after the reform: employment, capital, sales, value added, and profits all increase. These effects appear stronger in credit-constrained firms, consistent with liquidity effects. Second, heavily treated firms increase the wages of all their workers -- young as well as old -- collectively, perhaps through rent sharing. Wages of low paid workers rise more in percentage terms. Rather than canonical market-level adjustment, we uncover a crucial role of firm-level mechanisms in the transmission of payroll tax cuts.
Author: Johan Egebark
Publisher:
ISBN:
Category :
Languages : en
Pages : 44
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Book Description
In 2007, the Swedish employer-paid payroll tax was cut on a large scale for young workers, substantially reducing labor costs for this group. Using Difference-in-Differences paired with exact matching, we estimate a small impact, both on employment and on wages, implying a labor demand elasticity for young workers at around -0.31. Since the tax reduction applied also to existing employments, the cost of the reform was sizable, and the estimated cost per created job is at more than four times that of directly hiring workers at the average wage. Hence, we conclude that payroll tax cuts are an inefficient way to boost employment for young individuals.
Author:
Publisher:
ISBN:
Category : Tax revenue estimating
Languages : en
Pages : 56
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Book Description
Author: United States. Congress. Senate. Select Committee on Small Business
Publisher:
ISBN:
Category : Employment tax credit
Languages : en
Pages : 474
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Book Description
Author: Mr.Raphael A. Espinoza
Publisher: International Monetary Fund
ISBN: 1498386474
Category : Business & Economics
Languages : en
Pages : 37
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Book Description
The paper presents a simple supply side, general equilibrium model to estimate the macroeconomic effects of labor tax cuts. The model assumes that output is produced using capital, unskilled and skilled workers, and public servants. Wage formation for skilled workers features a Blanchflower-Oswald wage curve, while the labor supply for unskilled workers is very elastic around the minimum wage for small changes in employment. The model is calibrated for France and used to estimate the output and employment effects induced by two recent tax reforms: the Crédit d’Impôt pour la Compétitivité et l’Emploi (CICE) and the Pacte de Solidarité Responsabilité (RSP). We find that the tax cuts, if not offset by other fiscal measures, would contribute overall to creating around 200,000 jobs in the short run (600,000 jobs in the long run). Since the model abstracts from demand side effects, the results should be interpreted as providing estimates of the effect of tax measures on potential output and potential employment.
Author: Tito Boeri
Publisher: Princeton University Press
ISBN: 0691208824
Category : Business & Economics
Languages : en
Pages : 704
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Book Description
The leading textbook on imperfect labor markets and the institutions that affect them—now completely updated and expanded Today's labor markets are witnessing seismic changes brought on by such factors as rising self-employment, temporary employment, zero-hour contracts, and the growth of the sharing economy. This fully updated and revised third edition of The Economics of Imperfect Labor Markets reflects these and other critical changes in imperfect labor markets, and it has been significantly expanded to discuss topics such as workplace safety, regulations on self-employment, and disability and absence from work. This new edition also features engaging case studies that illustrate key aspects of imperfect labor markets. Authoritative and accessible, this textbook examines the many institutions that affect the behavior of workers and employers in imperfect labor markets. These include minimum wages, employment protection legislation, unemployment benefits, family policies, equal opportunity legislation, collective bargaining, early retirement programs, and education and migration policies. Written for advanced undergraduates and beginning graduate students, the book carefully defines and measures these institutions to accurately characterize their effects, and discusses how these institutions are being transformed today. Fully updated to reflect today's changing labor markets Significantly expanded to discuss a wealth of new topics, including the impact of the COVID-19 pandemic Features quantitative examples, new case studies, data sets that enable users to replicate results in the literature, technical appendixes, and end-of-chapter exercises Unique focus on institutions in imperfect labor markets Self-contained chapters cover each of the most important labor-market institutions Instructor's manual available to professors—now with new exercises and solutions
Author: Christopher A. Pissarides
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
I model and simulate the effects of employment tax cuts on unemployment and wages in four equilibrium models: competitive, union bargaining, search and efficiency wages. I find that if the ratio of unemployment compensation to wages is fixed, the effect of the tax cut is mainly on wages.
Author: United States. Congress. House. Committee on Small Business. Subcommittee on Tax, Access to Equity Capital, and Business Opportunities
Publisher:
ISBN:
Category : Depreciation allowances
Languages : en
Pages : 464
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Book Description
Author: OECD
Publisher: OECD Publishing
ISBN: 9264700072
Category :
Languages : en
Pages : 166
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Book Description
This report adds two perspectives on informality. It disassembles the mechanics of the deleterious links between informal employment, low-paying work and low skills. It shows that informal employment is highly persistent, and that the vulnerability of informal workers is passed on to their children in the absence of adequate education, skills and social protection policy.
