IDEAS home Printed from
   My bibliography  Save this paper

Una evaluación económica a los incentivos fiscales a la inversión en Uruguay


  • Fedora Carbajal

    () (Cinve)

  • Paula Carrasco

    () (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)

  • Paola Cazulo

    () (Cinve)

  • Cecilia Llambí

    () (Cinve)

  • Andrés Rius

    () (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)


Investment promotion through tax incentives has been a key component of the last two governments’ strategy to stimulate the accumulation of productive assets. A public policy mechanism such as the Investment Promotion Regime (IPR, established by Decree 455/007) inevitably raises questions about its effectiveness (i.e., the capacity to achieve its objectives), efficiency (i.e., capacity to achieve those objectives minimizing the waste of resources and generation of unnecessary distortions), and the unintended and undesirable outcomes. For this document, the effects of tax incentives on investment, employment and the productivity of labor are estimated. The method used is Matched Differences in Differences, on the panel of firms affected by the main corporate income tax (IRAE), between 2005 and 2011. The evidence shows that the IPR had significant positive effect on investment and employment. The effect on investment increases until the third year and then declines. The effect on employment is increasing and persists over the first five years. No positive effects on productivity were found.

Suggested Citation

  • Fedora Carbajal & Paula Carrasco & Paola Cazulo & Cecilia Llambí & Andrés Rius, 2014. "Una evaluación económica a los incentivos fiscales a la inversión en Uruguay," Documentos de Trabajo (working papers) 14-20, Instituto de Economía - IECON.
  • Handle: RePEc:ulr:wpaper:dt-20-14

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. World Bank, 2010. "Informality in Colombia : Implications for Worker Welfare and Firm Productivity," World Bank Other Operational Studies 2889, The World Bank.
    2. Jesús Botero García, 2010. "El impacto de las restricciones a las exportaciones colombianas a Venezuela," DOCUMENTOS DE TRABAJO CIEF 010614, UNIVERSIDAD EAFIT.
    3. Marisa Bucheli & Rodrigo Ceni, 2010. "Informality Sectoral Selection and Earnings in Uruguay," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 25(2), pages 281-307.
    4. Schneider, Friedrich, 2012. "The Shadow Economy and Work in the Shadow: What Do We (Not) Know?," IZA Discussion Papers 6423, Institute for the Study of Labor (IZA).
    5. Juan J Dolado & Carlos Garcia--Serrano & Juan F. Jimeno, 2002. "Drawing Lessons From The Boom Of Temporary Jobs In Spain," Economic Journal, Royal Economic Society, vol. 112(721), pages 270-295, June.
    6. Robert Holzmann & David A. Robalino & Noriyuki Takayama, 2009. "Closing the Coverage Gap : The Role of Social Pensions and Other Retirement Income Transfers," World Bank Publications, The World Bank, number 2651.
    7. David Giuliodori & Rodolfo Stucchi, 2012. "Innovation and job creation in a dual labor market: evidence from Spain," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 21(8), pages 801-813, November.
    8. Maloney, William F., 2004. "Informality Revisited," World Development, Elsevier, vol. 32(7), pages 1159-1178, July.
    9. Johnson, Simon & Kaufmann, Daniel & Zoido-Lobaton, Pablo, 1998. "Regulatory Discretion and the Unofficial Economy," American Economic Review, American Economic Association, vol. 88(2), pages 387-392, May.
    10. Ulyssea, Gabriel, 2010. "Regulation of entry, labor market institutions and the informal sector," Journal of Development Economics, Elsevier, vol. 91(1), pages 87-99, January.
    11. Loayza, Norman V. & Serven, Luis & Sugawara, Naotaka, 2009. "Informality in Latin America and the Caribbean," Policy Research Working Paper Series 4888, The World Bank.
    12. Sebastian Galiani & Federico Weinschelbaum, 2012. "Modeling Informality Formally: Households And Firms," Economic Inquiry, Western Economic Association International, vol. 50(3), pages 821-838, July.
    13. Pratap, Sangeeta & Quintin, Erwan, 2006. "Are labor markets segmented in developing countries? A semiparametric approach," European Economic Review, Elsevier, vol. 50(7), pages 1817-1841, October.
    14. Amaral, Pedro S. & Quintin, Erwan, 2006. "A competitive model of the informal sector," Journal of Monetary Economics, Elsevier, vol. 53(7), pages 1541-1553, October.
    15. Magnac, Th, 1991. "Segmented or Competitive Labor Markets," Econometrica, Econometric Society, vol. 59(1), pages 165-187, January.
    16. Loayza, Norman V. & Rigolini, Jamele, 2011. "Informal Employment: Safety Net or Growth Engine?," World Development, Elsevier, vol. 39(9), pages 1503-1515, September.
    17. Lorenzo Cappellari & Carlo Dell’Aringa & Marco Leonardi, 2012. "Temporary Employment in Italy," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(1), pages 55-62, 04.
    18. Ihrig, Jane & Moe, Karine S., 2004. "Lurking in the shadows: the informal sector and government policy," Journal of Development Economics, Elsevier, vol. 73(2), pages 541-557, April.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Amarante, Verónica & Gómez, Marcela, 2016. "El proceso de formalización en el mercado laboral uruguayo," Estudios y Perspectivas – Oficina de la CEPAL en Montevideo 20, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    2. Osmel Manzano & Sebastián Auguste & Laura Alfaro & Daniel Artana & Adolfo Taylhardat & Mario Cuevas & Luis Porto, 2015. "Partners or Creditors? Attracting Foreign Investment and Productive Development to Central America and Dominican Republic," IDB Publications (Books), Inter-American Development Bank, number 88273 edited by Sebastián Auguste & Mario Cuevas & Osmel Manzano, February.
    3. Verónica Amarante & Rodrigo Arim & Mijail Yapor, 2016. "Decomposing inequality changes in Uruguay: the role of formalization in the labor market," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-20, December.
    4. repec:idb:idbbks:6820 is not listed on IDEAS

    More about this item


    Investment; economic evaluation; tax incentives; Uruguay;

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ulr:wpaper:dt-20-14. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Andrés Dean). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.