Employment and growth effects of tax reforms in a growth-matching model
AbstractThis paper explores how revenue-neutral tax reforms impact employment and economic growth in models of exogenous and endogenous growth and search frictions on the labor market. We show that (i) a cut in the payroll tax financed by an increase in the wage tax lowers both equilibrium employment and the equilibrium growth rate, that (ii) a higher energy tax combined with a cut in wage taxes boosts employment but has an ambiguous effect on growth, and that (iii) a higher energy tax combined with a cut in payroll taxes enhances employment but mitigates economic growth. --
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Bibliographic InfoPaper provided by Hamburg Institute of International Economics (HWWA) in its series HWWA Discussion Papers with number 208.
Date of creation: 2002
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Web page: http://www.econstor.eu/handle/10419/20
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Find related papers by JEL classification:
- E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
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- Birk, Angela & Michaelis, Jochen, 2004.
"Employment- and Growth Effects of Tax Reforms,"
Center for European, Governance and Economic Development Research Discussion Papers
29, University of Goettingen, Department of Economics.
- Krimmer, Pascal & Raffelhüschen, Bernd, 2003. "Intergenerative Umverteilung und Wachstumsimpulse der Steuerreformen 1999 bis 2005: Die Perspektive der Generationenbilanz," Discussion Papers 105, Institut für Finanzwissenschaft, Albert-Ludwigs-Universität Freiburg.
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