Publication Type
Book Chapter
Version
submittedVersion
Publication Date
2011
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
Publication
Perspectives on the Performance of the Continental Economies
Editor
Edmund Phelps and Hans-Werner Sinn
First Page
429
Last Page
446
ISBN
9786613148070
Identifier
10.7551/mitpress/9780262015318.003.0014
Publisher
MIT Press
City or Country
Cambridge, MA
Citation
Hoon, Hian Teck. 2011. "Payroll Taxes, Wealth and Employment in Neoclassical Theory: Neutrality or Non-Neutrality?" In Perspectives on the Performance of the Continental Economies, edited by Edmund Phelps and Hans-Werner Sinn, 429-446. Cambridge, MA: MIT Press.
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.
Additional URL
https://doi.org/10.7551/mitpress/9780262015318.003.0014
Comments
Edited by Edmund Phelps and Hans-Werner Sinn. Full text available in working paper http://ink.library.smu.edu.sg/soe_research/1146/