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Do R&D tax incentives lead to higher wages for R&D workers? Evidence from The Netherlands

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  • Lokshin, Boris
  • Mohnen, Pierre

Abstract

This paper examines the impact of the Dutch R&D tax incentive scheme on the wages of R&D workers. We construct firm specific R&D tax credit rates that vary over time following variations in the Dutch R&D tax incentive program. Using instrumental variables we estimate a wage-sharing model with an unbalanced firm-level panel data covering the period 1997–2004. The elasticity of the R&D wage with respect to the fraction of the wage supported by the fiscal incentives scheme is estimated at 0.2 in the short run and 0.24 in the long run.

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Bibliographic Info

Article provided by Elsevier in its journal Research Policy.

Volume (Year): 42 (2013)
Issue (Month): 3 ()
Pages: 823-830

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Handle: RePEc:eee:respol:v:42:y:2013:i:3:p:823-830

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Keywords: R&D wages; Tax incentives;

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