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The Effets of Payroll Tax Subsidies for Low Wage Workers on Firms Level Decisions

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  • Bruno Crépon

    (Crest)

  • Rozenn Desplatz

    (Crest)

Abstract

We study the effect of the large increase of payroll tax subsidies for low-wage workersthat occurred in France in 1995. We compute the ex ante changes in average labor costs in1994 solely due to the changes in the tax subsidies and consider it as a treatment variable.We extend the Rubin causal framework to the case of a continuous treatment, define theensuing parameters of interest and generalize the propensity score property. We find thatpayroll tax subsidies had a strong effects on employment and on other firms outcomes,stock of capital, share of unskilled workers and average labor cost.

Suggested Citation

  • Bruno Crépon & Rozenn Desplatz, 2003. "The Effets of Payroll Tax Subsidies for Low Wage Workers on Firms Level Decisions," Working Papers 2003-06, Center for Research in Economics and Statistics.
    • Handle: RePEc:crs:wpaper:2003-06
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    References listed on IDEAS

    as
    1. Andrews, Donald W K, 1991. "Asymptotic Normality of Series Estimators for Nonparametric and Semiparametric Regression Models," Econometrica, Econometric Society, vol. 59(2), pages 307-345, March.
    2. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-475, March.
    3. Donald B. Rubin, 1977. "Assignment to Treatment Group on the Basis of a Covariate," Journal of Educational and Behavioral Statistics, , vol. 2(1), pages 1-26, March.
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    Cited by:

    1. Bruno Crépon & Marc Ferracci & Grégory Jolivet & Gerard J. van den Berg, 2009. "Active Labor Market Policy Effects in a Dynamic Setting," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 595-605, 04-05.

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