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Employment Effects of Payroll Taxes - An Empirical Test for Germany

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Author Info
Riphahn, Regina T. () (SELAPO, University of Munich)
Bauer, Thomas () (IZA Bonn)

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Abstract

This study tests to what degree the incidence of payroll taxes in Germany is on employment and whether in consequence payroll taxes, in particular social insurance contributions, are the culprit behind the growing unemployment problem. Using industry level data for 18 years (1977-1994) we estimate a system of five interdependent, dynamic factor demand equations. Various simulations indicate that the employment effects of payroll taxes are minimal

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 11.

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Length: 29 pages
Date of creation: Jun 1998
Date of revision:
Handle: RePEc:iza:izadps:dp11

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Related research
Keywords: dynamic labor demand; payroll tax; unemployment; social insurance;

Other versions of this item:

Find related papers by JEL classification:
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Private Pensions
H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm

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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.:
  1. Timo Tyrväinen, 1995. "Real Wage Resistance and Unemployment: Multivariate Analysis of Cointegrating Relations in 10 OECD Countries," OECD Jobs Study Working Papers 10, OECD, Directorate for Employment, Labour and Social Affairs. [Downloadable!]
  2. Rossana, Robert J, 1990. "Interrelated Demands for Buffer Stocks and Productive Inputs: Estimates for Two-Digit Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 72(1), pages 19-29, February. [Downloadable!] (restricted)
  3. Flaig, Gebhard & Steiner, Viktor, 1989. "Stability and Dynamic Properties of Labour Demand in West German Manufacturing," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 51(4), pages 395-412, November.
  4. Kraft, Kornelius, 1997. "Hiring and Dismissal Costs in Theory and Practice: A Comparison of Institutional Constraints and Employment Adjustment Patterns in Six OECD Countries," Kyklos, Blackwell Publishing, vol. 50(3), pages 341-68.
  5. Hart, Robert A. & McGregor, Peter G., 1988. "The returns to labour services in West German manufacturing industry," European Economic Review, Elsevier, vol. 32(4), pages 947-963, April. [Downloadable!] (restricted)
  6. Konig, Heinz & Pohlmeier, Winfried, 1988. "Employment, Labour Utilization and Procyclical Labour Productivity," Kyklos, Blackwell Publishing, vol. 41(4), pages 551-72.
  7. Schmidt, Christoph M, 1994. "Relative Wage Effects of German Unions," CEPR Discussion Papers 918, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  8. Entorf, Horst & Konig, Heinz & Pohlmeier, Winfried, 1992. " Labor Utilization and Nonwage Labor Costs in a Disequilibrium Macro Framework," Scandinavian Journal of Economics, Blackwell Publishing, vol. 94(1), pages 71-83.
  9. Machin, Stephen & Manning, Alan, 1997. "Minimum wages and economic outcomes in Europe," European Economic Review, Elsevier, vol. 41(3-5), pages 733-742, April. [Downloadable!] (restricted)
  10. Gruber, Jonathan, 1997. "The Incidence of Payroll Taxation: Evidence from Chile," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages S72-101, July. [Downloadable!] (restricted)
    Other versions:
  11. Stephen Nickell & D Nicolitsas, 1994. "Wages," CEP Discussion Papers dp0219, Centre for Economic Performance, LSE. [Downloadable!]
  12. Daniel S. Hamermesh & Gerard A. Pfann, 1996. "Adjustment Costs in Factor Demand," Journal of Economic Literature, American Economic Association, vol. 34(3), pages 1264-1292, September. [Downloadable!] (restricted)
    Other versions:
  13. Summers, Lawrence H, 1989. "Some Simple Economics of Mandated Benefits," American Economic Review, American Economic Association, vol. 79(2), pages 177-83, May. [Downloadable!] (restricted)
  14. Felix Fitzroy & Michael Funke, 1993. "Real Wages, Investment and Employment - New Evidence From West German Sectoral Data," CRIEFF Discussion Papers 9305, Centre for Research into Industry, Enterprise, Finance and the Firm.
    Other versions:
  15. Jonathan Gruber & Alan B. Krueger, 1991. "The Incidence of Mandated Employer-Provided Insurance: Lessons from Workers' Compensation Insurance," NBER Chapters, in: Tax Policy and the Economy, Volume 5, pages 111-144 National Bureau of Economic Research, Inc. [Downloadable!]
    Other versions:
  16. Gruber, Jonathan, 1994. "The Incidence of Mandated Maternity Benefits," American Economic Review, American Economic Association, vol. 84(3), pages 622-41, June. [Downloadable!] (restricted)
  17. Keane, Michael P & Prasad, Eswar S, 1996. "The Employment and Wage Effects of Oil Price Changes: A Sectoral Analysis," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 389-400, August. [Downloadable!] (restricted)
    Other versions:
  18. Nadiri, M Ishaq & Rosen, Sherwin, 1969. "Interrelated Factor Demand Functions," American Economic Review, American Economic Association, vol. 59(4), pages 457-71, Part I Se. [Downloadable!] (restricted)
  19. Stephen Machin & Alan Manning, 1992. "Minimum Wages," CEP Discussion Papers dp0080, Centre for Economic Performance, LSE.
Full references

Cited by:
(explanations, 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.)

  1. Wagstaff, Adam, 2007. "Social health insurance reexamined," Policy Research Working Paper Series 4111, The World Bank. [Downloadable!]
  2. Immervoll H, 2004. "Average And Marginal Effective Tax Rates Facing Workers In The EU. A Micro Level Analysis Of Levels, Distributions And Driving Factors (Revised Version Of EM2/02)," EUROMOD Working Papers EM6/04, EUROMOD at the Institute for Social and Economic Research. [Downloadable!]
  3. Immervoll H, 2002. "The Distribution Of Average And Marginal Effective Tax Rates In European Union Member States," EUROMOD Working Papers EM2/02, EUROMOD at the Institute for Social and Economic Research. [Downloadable!]
  4. Caroline Dieckhoener & Andreas Peichl, 2009. "Financing Social Security: Simulating Different Welfare State Systems for Germany," SOEPpapers 180, DIW Berlin, The German Socio-Economic Panel (SOEP). [Downloadable!]
    Other versions:
  5. Thalmaier, Anja, 1999. "Bestimmungsgründe von Fehlzeiten: Welche Rolle spielt die Arbeitslosigkeit?," IZA Discussion Papers 62, Institute for the Study of Labor (IZA). [Downloadable!]
  6. Herwig Immervoll, 2003. "The Distribution Of Average And Marginal Effective Tax Rates In European Union Member States," Public Economics 0302005, EconWPA. [Downloadable!]
  7. Daniela Sonedda, 2006. "A structural VAR approach on labour taxation policies," Applied Economics, Taylor and Francis Journals, vol. 38(1), pages 95-114, January. [Downloadable!] (restricted)
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