Tax policy and OECD unemployment

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Title: Tax policy and OECD unemployment
Authors: Ó Murchú, Alvin
Permanent link: http://hdl.handle.net/10197/1276
Date: Dec-2002
Abstract: The effect of changes in payroll taxes on wages is a question of tax incidence. If workers can shift the burden of taxation onto employers, in the form of higher wages, we may expect increases in unemployment. This paper examines the extent to which workers succeed in shifting the burden of taxation onto employers and therefore the effects on unemployment of higher direct taxes. A reduced form vector autoregression model is used to estimate the effects, of a shock to direct taxes, on both wages and unemployment. The empirical estimates, estimated separately for eleven OECD countries, show workers failing to shift the burden of higher taxes and consequently insignificant changes in unemployment.
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Subject LCSH: Fiscal policy--OECD countries
Unemployment--OECD countries
Unemployment--Effect of wages on
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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