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Labor Taxes in Local Labor Markets: Evidence from Italian Regions

Author

Listed:
  • Giorgio Brunello

    (University of Padua, CESifo and IZA)

  • Claudio Lupi

    (University of Molise (Campobasso))

  • Patrizia Ordine

    (University of Calabria)

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.

Suggested Citation

  • Giorgio Brunello & Claudio Lupi & Patrizia Ordine, 2005. "Labor Taxes in Local Labor Markets: Evidence from Italian Regions," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 64(1), pages 29-54, September.
    • Handle: RePEc:gde:journl:gde_v64_n1_p29-54
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    3. Daniela Sonedda, 2009. "On the Dynamics of Unemployment and Labor Tax Progression: The Case of Italy 1974-1995," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 65(3), pages 271-296, September.

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    More about this item

    Keywords

    regional unemployment; labor taxes;

    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

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