Cervini-Plá, María, Ramos, Xavier, Silva Becerra, Jose I. (2014) Wage Effects of Non-wage Labour Costs. European Economic Review, 72 . pp. 113-137. ISSN 0014-2921. (doi:10.1016/j.euroecorev.2014.09.005) (KAR id:43322)
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Official URL: http://dx.doi.org/10.1016/j.euroecorev.2014.09.005 |
Abstract
We study wage effects of two important elements of non-wage labour costs: firing costs and payroll taxes. We exploit a reform that introduced substantial reduction in these two provisions for unemployed workers aged less than 30 and over 45 years who got a permanent job. A matching model with heterogeneous workers predicts positive wage effects of reducing firing costs but ambiguous wage effects of reducing payroll taxes, for both new entrant and incumbent workers. Difference-in-differences estimates and simulation of the model show positive wage effects for both new entrant and incumbent workers. The reduction in firing costs accounts for up to half of the overall wage increase for new entrants but only 10% for incumbents.
Item Type: | Article |
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DOI/Identification number: | 10.1016/j.euroecorev.2014.09.005 |
Uncontrolled keywords: | Dismissal costs; Payroll tax; Evaluation of labour market reforms; Difference-in-difference; Matching model |
Subjects: | H Social Sciences > HB Economic Theory |
Divisions: | Divisions > Division of Human and Social Sciences > School of Economics |
Depositing User: | Jose Silva Becerra |
Date Deposited: | 13 Oct 2014 15:05 UTC |
Last Modified: | 05 Nov 2024 10:27 UTC |
Resource URI: | https://kar.kent.ac.uk/id/eprint/43322 (The current URI for this page, for reference purposes) |
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