An Econometric Analysis of the Employment and Revenue Effects of the Treu Reform in the Period 1997-2001

Silvia Fedeli (), Francesco Forte and Ernesto Zangari ()
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Silvia Fedeli: Sapienza, Università di Roma

Rivista di Politica Economica, 2008, vol. 98, issue 1, 215-248

Abstract: An employment package (EP), reducing the social security taxes (SC) and increasing labour flexibility, was introduced in Italy by the centre-left Government in 1997. We show econometrically that EP had positive effect also on the SC revenue. Using time series techniques, with data 1980-1996, we estimate a model of labour market implicitly based on the old SC regime and assess the hypothetical level of employment without EP for 1997-2001. We, thus, determine the difference between the actual SC-revenues and SC-revenues without EP. This difference results positive and increasing through time, showing a peculiar Laffer effect.

JEL-codes: E24 E27 E62 H27 (search for similar items in EconPapers)
Date: 2008
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