Employment and Wage Effects of Social Security Financing — An Empirical Analysis of the West German Experience and Some Policy Simulations

Steiner, Viktor

doi:10.1007/978-3-540-24780-7_13

Cited by 3 publications

(4 citation statements)

References 11 publications

(10 reference statements)

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“…These findings confirm the results of Steiner (1996), and Hart and Kawasaki (1988), and are in contrast to the large employment effects of Hansen (1996) or Entorf et al (1992). Examples are vacation days, legal holidays, job protection, health and safety regulations, or sick leave.…”

Section: Simulation Resultssupporting

confidence: 62%

“…These were not confirmed in papers that applied partial macromodels or which estimated systems of factor demand equations derived from models of firm behavior. Steiner (1996) reevaluates the estimation framework that underlies the OECD jobs study (1995) and estimates a dynamic macroeconomic model of wages and employment using an error Most similar to our study is the paper by Hart and Kawasaki (1988). They estimate a system of three dynamic factor demand equations on aggregate annual data jointly for the entire manufacturing industry for the period between 1950 and 1982.…”

Section: The Literature On Payroll Taxationmentioning

confidence: 99%

“…While studies on labor demand in Germany abound, only a few empirical investigations have looked at the impact of nonwage labor costs on labor demand and ultimately on employment in Germany. Generally, three different empirical frameworks have been applied: Structural multi-equation systems of macro models of the economy (Hansen, 1996, or Entorf et al 1992, partial macroeconomic models (Steiner, 1996), and microeconomic systems of factor demand equations (e.g. Hart and Kawasaki, 1988).…”

Section: The Literature On Payroll Taxationmentioning

confidence: 99%

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Employment effects of payroll taxes - an empirical test for Germany

Bauer¹,

Riphahn²

2002

Applied Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent, nonprofit limited liability company (Gesellschaft mit beschränkter Haftung) supported by the Deutsche Post AG. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. The current research program deals with (1) mobility and flexibility of labor markets, (2) internationalization of labor markets and European integration, (3) the welfare state and labor markets, (4) labor markets in transition, (5) the future of work, and (6) general labor economics. Terms of use: Documents in EconStor may D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. IntroductionSupported by the OECD Jobs Study (1994) it has become common knowledge that receding employment is due to high payroll taxes, and that the provisions of welfare states, which are largely financed by mandatory payroll taxes, must be cut back to facilitate a return to full employment (for the case of Germany, see SVR, 1996). Following this view, European policymakers have recently begun to reign in welfare states by relieving employers of financial obligations, tightening regulations, qualifying eligibility conditions and narrowing the targets of social policy measures (cf. Rhodes, 1996). While there may be good reasons for such reforms, a crucial element in the political argument has remained without sufficient empirical support: the effect of payroll taxes on employment. This paper examines the evidence on this issue. Afterall, a policy of driving back the welfare state to reduce nonwage labor costs can only be expected to increase labor demand if payroll taxes do have negative effects on employment.Initial inspection of German data indeed indicates a negative relationship between payroll taxes and employment: Figure 1 shows that as the contribution rates to social insurances, i.e.payroll taxes paid by employers on...

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Section: Simulation Resultssupporting

confidence: 62%

Section: The Literature On Payroll Taxationmentioning

confidence: 99%

Section: The Literature On Payroll Taxationmentioning

confidence: 99%

See 1 more Smart Citation

Employment effects of payroll taxes - an empirical test for Germany

Bauer¹,

Riphahn²

2002

Applied Economics

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“…Financing with higher value added tax rate increases in question affect. Steiner (1996) investigated a reduction of the social security contribution rates are financed by increasing indirect taxes on employment for Germany. The result is a positive employment effect of reducing social security contribution rates in short-run, but modest effects remain due to higher wages in long-run.…”

Section: Previous Literaturementioning

confidence: 99%

The Impact on Unemployment of Social Security Contributions: the Empiricial Analysis in Turkey

Giray¹,

Çınar²

2017

Europ. j. multidiscip. stud.

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Social security contributions are important public incomes after taxes in OECD countries. Beside, social security contributions as a mean of the finance of social security system is a determiner on the main macroeconomic factors such as savings, employment, the cost of employment, the level of shadow economy, economic growth, competitiveness and income inequality. Employment has been important policy goals in Turkey like many OECD countries during recent decades. High unemployment rate is a serious problem for countries. Effecting negatively labor market, high burden of social security contributions causes low level of employment. The aim of this study is to find the relationship between social security contributions and unemployment for Turkey. Therefore, we can evaluate whether reducing social security contributions is a way reducing of unemployment or not. We use time series data during period 1965-2015. The research methodology is based on an analysis of indicators as unemployment rate, social security contributions as percentage of GDPs, the percentage of total tax revenues. Unit root test is non-stationary for social security contributions. On the other hand, unemployment is stationary for related period. The long run relationship between variables was tested by ARDL bound test approach. Based on the sample results, there is a long run cointegration between social security contributions and unemployment rate (both as percentage of GDP and percentage of taxation).

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Welfare Effects of Alternative Financing of Social Security: Some Calculations for Belgium

et al. 2008

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We analyse the distributional impact of lowering social security contributions and compensating the revenue loss by an increase in indirect taxes. We empirically assess the distributional consequences of this shift by using two Belgian microsimulation models: modété for the tax benefit system, and aster for the indirect tax part. Since the underlying micro database of the tax benefit system does not contain expenditures, we first impute detailed expenditures in the income data survey, by means of semiparametric Engelcurves.The currently living generation of pensioners belongs to the losers by such a reform: They do not profit from the reduced tax on labour income, but pay higher consumption prices. Less obvious, also part of the working population loses. Even not all those who leave unemployment after the reform are gainers.We also investigate the sensitivity of the results w.r.t. the choice of welfare measure to assess the combined change in disposable income, consumer prices and -in the case of flexible labour supply -leisure. We show how the specific choice and parameters of the welfare measure will influence the conclusions, possibly even more than the predictive model for assessing the behavioural reactions in labour supply.

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Employment and Wage Effects of Social Security Financing — An Empirical Analysis of the West German Experience and Some Policy Simulations

Cited by 3 publications

References 11 publications

Employment effects of payroll taxes - an empirical test for Germany

Employment effects of payroll taxes - an empirical test for Germany

The Impact on Unemployment of Social Security Contributions: the Empiricial Analysis in Turkey

Welfare Effects of Alternative Financing of Social Security: Some Calculations for Belgium

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