Average Labor Taxes and Unemployment: Evidence from Italian Regions

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Average Labor Taxes and Unemployment: Evidence from Italian Regions

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Brunello, Giorgio
Lupi, Claudio ()
Ordine, Patrizia

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Abstract

By focusing on the Italian experience, we ask whether the relationship between labor taxes and unemployment varies across regions. In spite of similar national labor market institutions, we show that this relationship is significantly stronger in the highly industrialized North than in the less developed South, where unemployment is much higher. An important source of variation in the regional responsiveness of unemployment originates from the fact that regional gross wages in the North increase more than in the South in response to a hike in labor taxes.

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Paper provided by University of Molise, Dept. SEGeS in its series Economics & Statistics Discussion Papers with number esdp03011.

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Length: 30 pages
Date of creation: 19 Oct 2003
Date of revision:
Handle: RePEc:mol:ecsdps:esdp03011

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For technical questions regarding this item, or to correct its listing, contact: (Claudio Lupi).

Find related papers by JEL classification:
J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

This paper has been announced in the following NEP Reports:

NEP-ALL-2003-10-28 (All new papers)
NEP-LAB-2003-10-28 (Labour Economics)
NEP-LTV-2003-10-28 (Unemployment, Inequality & Poverty)
NEP-PBE-2003-10-28 (Public Economics)

References listed on IDEAS
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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.)

Kees Folmer, 2009. "Why do macro wage elasticities diverge?," CPB Memoranda 224, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
Kees Folmer, 2009. "Why do macro wage elasticities diverge?," CPB Discussion Papers 122, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]

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