Publication Type
Working Paper
Version
publishedVersion
Publication Date
5-2009
Abstract
The theoretical proposition that temporarily below-normal tax rates on labor this year, when merged with the prospect of reversion to normal rates next year, will encourage households to squeeze more work into this year and to work less in future years is well-founded. This proposition was recently tested anew on Icelandic data and performed well empirically (Bianchi, Gudmundsson and Zoega (2001)). But would a permanent cut in tax rates on labor encourage more work permanently—with no diminution of effectiveness? Conversely, does a permanent increase in tax rates on labor cause a permanent decline in hours worked?
Keywords
Wealth, Employment, Taxation, Economic conditions, Europe
Discipline
Labor Economics
Research Areas
Applied Microeconomics
Volume
08-2009
First Page
1
Last Page
22
Publisher
SMU Economics and Statistics Working Paper Series, No. 08-2009
City or Country
Singapore
Citation
HOON, Hian Teck.
Payroll Taxes, Wealth and Employment in Neoclassical Theory: Neutrality or Non-Neutrality?. (2009). 08-2009, 1-22.
Available at: https://ink.library.smu.edu.sg/soe_research/1146
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Comments
Published in Perspectives on the performance of the continental economies, 2011, Cambridge: MIT Press. pp. 429-446. ISBN 9780262015318