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The response of labour taxation to changes in government debt

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Author Info

  • Holm-Hadulla, Fédéric
  • Leiner-Killinger, Nadine
  • Slavík, Michal

Abstract

This paper investigates the relationship between government debt and labour taxation for a panel of 18 EU countries over the period 1979-2008. The econometric estimates point to a statistically significant and economically relevant positive response of labour taxation to changes in the general government debt and interest expenditure-to-GDP ratios. The results are robust across a range of econometric specifications and labour tax indicators. JEL Classification: H2, H24, H63, J22

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Bibliographic Info

Paper provided by European Central Bank in its series Working Paper Series with number 1307.

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Date of creation: Mar 2011
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Handle: RePEc:ecb:ecbwps:20111307

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Related research

Keywords: debt; fiscal adjustment; labour taxes;

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Cited by:
  1. Pica, Federico & Villani, Salvatore, 2012. "Debito, Mezzogiorno e sviluppo. A trivial exercise
    [Sovereign Debt Sustainability, Mezzogiorno and Economic Growth. A Trivial Exercise]
    ," MPRA Paper 43199, University Library of Munich, Germany, revised 28 Nov 2012.
  2. Vanda Almeida & Gabriela Lopes de Castro & Ricardo Mourinho Félix & José R. Maria, 2011. "Fiscal policy in a small euro area economy," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department.

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