Firm Heterogeneity and the Impact of Payroll Taxes
This paper studies the impact of a large payroll tax cut for older workers in Hungary. Motivated by the predictions of a standard equilibrium job search model, the paper examines the heterogeneous impact of the policy. Employment increases most at low-productivity firms offering low-wage jobs, which tend to hire from unemployment, while the effects are more muted for high-productivity firms offering high-wage jobs. At the same time, wages only increase at high-productivity firms. These results point to important heterogeneity in the incidence of payroll tax cuts across firms and highlight that payroll taxes have a significant impact on the composition of jobs in the labor market.
| Main Authors: | , , , , |
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| Format: | Working Paper biblioteca |
| Language: | English English |
| Published: |
World Bank, Washington, DC
2022-12
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| Subjects: | PAYROLL TAX, TAX INCIDENCE, FIRM HETROGENEITY, LABOR MARKET, OLDER WORKERS, UNEMPLOYMENT, EMPLOYMENT OF OLDER WORKERS, |
| Online Access: | http://documents.worldbank.org/curated/en/099829512142214781/IDU057f5cf020802b0481f0bbae0e8716878b654 http://hdl.handle.net/10986/38396 |
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