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Do R&D tax incentives lead to higher wages for R&D workers? Evidence from the Netherlands

Listed author(s):
  • Lokshin, Boris

    ()

    (UNU-MERIT/MGSoG, and School of Business and Economics, Maastricht University)

  • Mohnen, Pierre

    ()

    (UNU-MERIT/MGSoG, and School of Business and Economics, Maastricht University)

This paper examines the impact of the Dutch R&D tax incentive scheme on the wages of R&D workers. We construct firm specific R&D tax credit rates that vary over time following variations in the Dutch R&D tax incentive program. Using instrumental variables we estimate a wage-sharing model with an unbalanced firm-level panel data covering the period 1997-2004. The elasticity of the R&D wage with respect to the fraction of the wage supported by the fiscal incentives scheme is estimated at 0.2 in the short run and 0.24 in the long run.

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File URL: http://www.merit.unu.edu/publications/wppdf/2012/wp2012-058.pdf
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Paper provided by United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) in its series MERIT Working Papers with number 058.

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Date of creation: 2012
Handle: RePEc:unm:unumer:2012058
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