Labor Taxes in Local Labor Markets: Evidence from Italian Regions

Giorgio Brunello, Claudio Lupi and Patrizia Ordine ()

Giornale degli Economisti, 2005, vol. 64, issue 1, 29-54

Abstract: By focusing on the Italian experience, we ask whether the relationship between labor taxes and unemployment varies across regions. In spite of similar national labor market institutions, we show that this relationship is significantly stronger in the highly industrialized North than in the less developed South, where unemployment is much higher. An important source of variation in the regional responsiveness of unemployment originates from the fact that regional gross wages in the North increase more than in the South in response to a hike in labor taxes.

Keywords: regional unemployment; labor taxes (search for similar items in EconPapers)
JEL-codes: H20 J51 (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (3)

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