Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/17919
Authors: 
Heitger, Bernhard
Year of Publication: 
2000
Series/Report no.: 
Kiel Working Paper 985
Abstract: 
This paper investigates unemployment and labour market rigidities in OECD countries in 1983?1994. The central issue is the taxation-unemployment relationship and whether this relationship is exogenous or simultaneously determined. Hausman specification tests indicate that the impact of taxation on short-term unemployment is positive and exogenous whereas the relationship between taxation and long-term unemployment is simultaneously determined. Correcting for this simultaneity results in a much higher, significant and positive regression coefficient for the impact of taxation. Thus, high taxation seems to be one of the main determinants of long-term unemployment.
Subjects: 
Unemployment
labour market institutions
taxation
JEL: 
E24
Document Type: 
Working Paper

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