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Is the impact of labor taxes on unemployment asymmetric

Tino Berger (UGent) and Gerdie Everaert (UGent)
(2013) MACROECONOMIC DYNAMICS. 17(1). p.143-154
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Abstract
This paper tests whether increases and decreases in labor taxes have an asymmetric impact on unemployment. Using a panel of 16 OECD countries over the period 1970–2005, we estimate a panel unobserved-component model to account for the fact that unemployment rates and labor taxes are nonstationary but not cointegrated. We find a positive impact of labor tax increases on unemployment in European and Nordic countries, whereas for labor tax decreases, no significant impact is found in these countries. For Anglo-Saxon countries, neither increases nor decreases in labor taxes have any impact on unemployment.
Keywords
TAXATION, MODELS, 1960S, DEMAND, WAGES, UK, Unemployment, Labor Taxes, Asymmetry, Unobserved-Component Model, OECD, DYNAMICS, ADJUSTMENT COSTS, EMPLOYMENT

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Citation

Please use this url to cite or link to this publication:

Chicago
Berger, Tino, and Gerdie Everaert. 2013. “Is the Impact of Labor Taxes on Unemployment Asymmetric.” Macroeconomic Dynamics 17 (1): 143–154.
APA
Berger, T., & Everaert, G. (2013). Is the impact of labor taxes on unemployment asymmetric. MACROECONOMIC DYNAMICS, 17(1), 143–154.
Vancouver
1.
Berger T, Everaert G. Is the impact of labor taxes on unemployment asymmetric. MACROECONOMIC DYNAMICS. 2013;17(1):143–54.
MLA
Berger, Tino, and Gerdie Everaert. “Is the Impact of Labor Taxes on Unemployment Asymmetric.” MACROECONOMIC DYNAMICS 17.1 (2013): 143–154. Print.
@article{3219201,
  abstract     = {This paper tests whether increases and decreases in labor taxes have an asymmetric impact on unemployment. Using a panel of 16 OECD countries over the period 1970--2005, we estimate a panel unobserved-component model to account for the fact that unemployment rates and labor taxes are nonstationary but not cointegrated. We find a positive impact of labor tax increases on unemployment in European and Nordic countries, whereas for labor tax decreases, no significant impact is found in these countries. For Anglo-Saxon countries, neither increases nor decreases in labor taxes have any impact on unemployment.},
  author       = {Berger, Tino and Everaert, Gerdie},
  issn         = {1365-1005},
  journal      = {MACROECONOMIC DYNAMICS},
  language     = {eng},
  number       = {1},
  pages        = {143--154},
  title        = {Is the impact of labor taxes on unemployment asymmetric},
  url          = {http://dx.doi.org/10.1017/S136510051100006X},
  volume       = {17},
  year         = {2013},
}
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