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dc.contributor.authorSaez, Emmanuelen_US
dc.contributor.authorMatsaganis, Manosen_US
dc.contributor.authorTsakloglou, Panosen_US
dc.date.accessioned2010-03-09en_US
dc.date.accessioned2010-07-07T12:06:25Z-
dc.date.available2010-07-07T12:06:25Z-
dc.date.issued2010en_US
dc.identifier.urihttp://hdl.handle.net/10419/36151-
dc.description.abstractThis paper analyzes the response of earnings to payroll tax rates using a cohort-based reform in Greece. All individuals who started working on or after 1993 face permanently a much higher earnings cap for payroll taxes, creating a large and permanent discontinuity in marginal payroll tax rates by date of entry in the labor force for upper earnings workers. Using full population administrative Social Security data and a Regression Discontinuity Design, we estimate the long-term incidence and effects of marginal payroll tax rates on earnings. Standard theory predicts that, in the long run, new regime workers should bear the entire burden of the payroll tax increase (relative to old regime workers). In contrast, we find that employers compensate new regime workers for the extra employer payroll taxes but not for the extra employee payroll taxes. We do not find any evidence of labor supply responses around the discontinuity, suggesting low efficiency costs of payroll taxes. The non-standard incidence results are the same across firms of different sizes. Tax incidence, however, is standard for older workers in the new regime as they bear both the employee and employer tax. Those results, combined with a direct small survey of employers, can be explained by social norms regarding pay seniority which create a growing wedge between pay and productivity as workers age.en_US
dc.language.isoengen_US
dc.publisherIZA Bonnen_US
dc.relation.ispartofseriesIZA Discussion Papers 4752en_US
dc.subject.jelJ31en_US
dc.subject.jelJ22en_US
dc.subject.jelH22en_US
dc.subject.ddc330en_US
dc.subject.keywordPayroll taxesen_US
dc.subject.keywordGreeceen_US
dc.subject.stwLohnsummensteueren_US
dc.subject.stwSteuerinzidenzen_US
dc.subject.stwEinkommenen_US
dc.subject.stwGriechenlanden_US
dc.titleEarnings determination and taxes: evidence from a cohort based payroll tax reform in Greeceen_US
dc.typeWorking Paperen_US
dc.identifier.ppn620659084en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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