Reducing social contributions on unskilled labour as a way of fighting unemployment: An empirical evaluation for the case of Spain
AbstractIn this paper we provide an empirical evaluation of the effects of a cut in social security contributions (i) for all types of labour, and (ii) only for unskilled labour, within a computable general equilibrium model simulated for the Spanish economy. The model allows firms to follow a non-competitive price rule, and incorporates an equal yield assumption, which means that the reduction in social security contributions is compensated with an increase in value-added tax rates, so that the public sector deficit is not affected. In addition, the labour market is assumed to follow a matching unemployment rule, which allows to model in a simple way any frictions present in that market.
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Bibliographic InfoPaper provided by Departamento de Economía - Universidad Pública de Navarra in its series Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra with number 0102.
Length: 32 pages
Date of creation: 2001
Date of revision:
Publication status: Published in
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Other versions of this item:
- Oscar Bajo-Rubio & Antonio G. Gómez-Plana, 2004. "Reducing Social Contributions for Unskilled Labor as a Way of Fighting Unemployment: An Empirical Evaluation for the Case of Spain," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 60(2), pages 160-, August.
- Oscar Bajo-Rubio & Antonio G. Gómez-Plana, . "Reducing social contributions on unskilled labour as a way of fighting unemployment: An empirical evaluation for the case of Spain," Studies on the Spanish Economy 107, FEDEA.
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
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