Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/174631
Authors: 
Stokke, Hildegunn
Year of Publication: 
2016
Series/Report no.: 
56th Congress of the European Regional Science Association: "Cities & Regions: Smart, Sustainable, Inclusive?", 23-26 August 2016, Vienna, Austria
Abstract: 
The empirical evidence on the incidence of payroll taxation is primarily based on the wage bill of firms. This paper applies matched employer-employee register data on individual wages for all private sector workers in Norway. Exploiting a payroll tax reform and using the difference-in-difference approach, I find that 1% reduction in labor costs generates 0.5% wage increase. Among low educated workers the degree of tax shifting equals 50%, while the wage response for highly educated is insignificant. Lower payroll taxes have limited effects on employment. The findings imply that the absolute value of the labor demand elasticity decreases with the level of education.
Subjects: 
Payroll tax cut
individual wages
heterogeneous effects
education
JEL: 
H22
J23
J31
J38
Document Type: 
Conference Paper

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