In this paper we evaluate the effects of a regional experiment that reduced payroll-taxes by 3–6 percentage points for three years in Northern Finland. We match each firm in the target region with a similar firm in the control region and estimate the effect of the payroll-tax reduction by comparing employment and wage changes within the matched pairs before and after the start of the experiment. According to our results the reduction in the payroll-taxes led to somewhat faster wage growth in the target region. The increase in wages offset roughly half of the impact of the payroll tax cut on the labour costs. The remaining labour cost reduction had no significant effects on employment.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by IFAU - Institute for Labour Market Policy Evaluation in its series Working Paper Series with number
2006:10.
Length: 29 pages Date of creation: 10 Oct 2006 Date of revision: Handle: RePEc:hhs:ifauwp:2006_010
Contact details of provider: Postal: Labour Market Policy Evaluation, P O Box 513, SE-751 20 Uppsala, Sweden Phone: (+46) 18 - 471 70 70 Fax: (+46) 18 - 471 70 71 Email: Web page: http://www.ifau.se/ More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Margareta Wicklander).
References listed on IDEAS 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.: