The Influence of the Tax Wedge on Unemployment in OECD Countries in Comparison with Croatia
AbstractThe tax wedge is the difference between the employer’s labour costs and the net takehome pay of the employee. An increase in the tax wedge leads to an increase in the companies’ labour costs and thus indirectly influences the level of unemployment. This article will try to answer these questions: Does the tax wedge affect the unemployment rate, how high is the tax wedge in Croatia in comparison with OECD countries, how does the tax wedge affect the unemployment rate in Croatia and would reducing the tax wedge be a solution to reduce unemployment? This article will show that Croatia is a country with a high tax wedge, which has negative affects on employment, and is partly “responsible” for the high unemployment. Thus, in dealing with unemployment problems, Croatia should work on its reduction.
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Bibliographic InfoArticle provided by Institute of Public Finance in its journal Financial Theory and Practice.
Volume (Year): 33 (2009)
Issue (Month): 4 ()
tax wedge; unemployment rate; labour costs; Croatia; OECD;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- European Commission, 2010. "Taxation trends in the European Union: 2010 edition," Taxation trends 2010, Directorate General Taxation and Customs Union, European Commission.
- Isabelle Joumard, 2002.
"Tax systems in European Union countries,"
OECD Economic Studies,
OECD Publishing, vol. 2002(1), pages 91-151.
- European Commission, 2013. "Taxation trends in the European Union: 2013 edition," Taxation trends 2013, Directorate General Taxation and Customs Union, European Commission.
- European Commission, 2008. "Taxation trends in the European Union: 2008 edition," Taxation trends 2008, Directorate General Taxation and Customs Union, European Commission.
- European Commission, 2011. "Taxation trends in the European Union: 2011 edition," Taxation trends 2011, Directorate General Taxation and Customs Union, European Commission.
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