Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/179710 
Year of Publication: 
2017
Series/Report no.: 
CASE Reports No. 487
Publisher: 
Center for Social and Economic Research (CASE), Warsaw
Abstract: 
The paper aims to assess the impact of selected elements of social harmonization on labor market performance in the European Union among two groups of workers - the total working population and the elderly. The aim is to examine whether upward changes in labor taxes affect employment, unemployment, and inactivity rates in the European Union. The descriptive empirical evidence shows that the level of labor taxation varies significantly across European countries and the introduced changes might affect national markets differently. The Arellano-Bond dynamic panel data regression shows that an increase in the tax wedge, as an element of a social harmonization process, has a very weak impact on labor market performance in the European Union. The impact is statistically significant and negative only for the elderly (i.e. the population aged 50+). Empirical analysis suggests that upward social convergence might negatively affect the employment of the most disfavored groups in the labor market, such as the elderly. It suggests that social harmonization focused on reducing the tax wedge would have favorable effects on labor market performance, especially among the most disadvantaged groups.
Subjects: 
employment of the elderly
minimum wage
social security contributions
labor tax
Social Europe
JEL: 
J31
J32
C23
J38
J41
J61
H53
H55
ISBN: 
978-83-7178-651-8
Document Type: 
Research Report

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