Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5099478 | Journal of Economic Dynamics and Control | 2010 | 11 Pages |
Abstract
This paper estimates the impact of labour taxes on unemployment using a panel of yearly observations (1970-2005) for 16 OECD countries. Possible heterogeneity of the unemployment incidence of taxes is taken into account by grouping countries according to their wage-setting institutions. Panel data unit root and cointegration tests show that unemployment and labour tax rates are non-stationary but not cointegrated. As this finding may be induced by missing non-stationary variables, we set up a panel unobserved component model. Labour taxes are found to have a positive impact on unemployment only in countries characterised by strong but decentralised unions.
Related Topics
Physical Sciences and Engineering
Mathematics
Control and Optimization
Authors
Tino Berger, Gerdie Everaert,