The impact of taxation on the labour market - Institute of Public Policies

Context

With the aim of promoting employment, France has, for more than twenty years, been implementing policies to exempt employers from social security contributions for employees whose pay is close to the minimum wage. For its part, Germany has managed to limit the burden of compulsory levies and implement wage moderation policies to maintain its competitiveness. By tracing the changes over time in these two countries, the aim is to gain a better understanding of the real effects of labour taxation.

Presentation

This project brings together two teams of researchers for a collaborative study on the impact of taxation on the labour market (income tax, corporation tax, as well as employee and employer social security contributions) on wages, employment and hours worked. The analysis is based on job-search models traditionally used in labour economics to model unemployment and individual employment trajectories. The effect of taxation is assessed using these models, which are estimated from administrative data covering a long period and involving very large samples.

Research Team

This project is led by the pole Labour.

Thomas Breda

François Fontaine

Haomin Wang

Method and Data

The French National Research Agency (ANR) is helping to fund the French team as part of the Franco-German research programme in the humanities and social sciences (ANR-14-FRAL-0011-01). The scientific partner is the Deutsches Institut für Wirtschaftsforschung (DIW-Berlin), a research centre specialising in economic policy in Germany; the German team comprises Peter Haan and Luke Haywood.

Context

Presentation

Research Team

Method and Data

Partners