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Title:Unemployment and labour market rigidities in OECD countries : the impact of taxes PDF Logo
Authors:Heitger, Bernhard
Issue Date:2000
Series/Report no.:Kieler Arbeitspapiere 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
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW
Kieler Arbeitspapiere, IfW

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