The direct incidence of corporate income tax on wages
Arulampalam, Wiji, Devereux, Michael P. and Maffini, Giorgia (2010) The direct incidence of corporate income tax on wages. Working Paper. Bonn: Institute for the Study of Labor (IZA). (IZA Discussion Papers. (Unpublished)Full text not available from this repository.
Official URL: http://papers.ssrn.com/sol3/Delivery.cfm/dp5293.pd...
We examine the extent to which taxes on corporate income are directly shifted onto the workforce. We use data on 55,082 companies located in nine European countries over the period 1996-2003. We identify this direct shifting through cross-company variation in tax liabilities, conditional on value added per employee. Our central estimate is that the long run elasticity of the wage bill with respect to taxation is -0.093. Evaluated at the mean, this implies that an exogenous rise of $1 in tax would reduce the wage bill by 49 cents. We find only weak evidence of a difference for multinational companies.
|Item Type:||Working or Discussion Paper (Working Paper)|
|Subjects:||H Social Sciences > HB Economic Theory|
|Divisions:||Faculty of Social Sciences > Economics|
|Series Name:||IZA Discussion Papers|
|Publisher:||Institute for the Study of Labor (IZA)|
|Place of Publication:||Bonn|
|Number of Pages:||46|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
|Funder:||Hundred Group, ETPF, Economic and Social Research Council (ESRC)|
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