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http://hdl.handle.net/10419/51691
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| Title: | | The direct incidence of corporate income tax on wages  |
| Authors: | | Arulampalam, Wiji Devereux, Michael P. Maffini, Giorgia |
| Issue Date: | | 2010 |
| Series/Report no.: | | Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 5293 |
| Abstract: | | We examine the extent to which taxes on corporate income are directly shifted onto the workforce. We use data on 55,082 companies located in nine European countries over the period 1996-2003. We identify this direct shifting through cross-company variation in tax liabilities, conditional on value added per employee. Our central estimate is that the long run elasticity of the wage bill with respect to taxation is -0.093. Evaluated at the mean, this implies that an exogenous rise of $1 in tax would reduce the wage bill by 49 cents. We find only weak evidence of a difference for multinational companies. |
| Subjects: | | income tax wage bargaining effective incidence |
| JEL: | | H22 H25 J50 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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