The Unemployment Puzzle of Corporate Taxation

Horst Feldmann

Public Finance Review, 2011, vol. 39, issue 6, 743-769

Abstract: Using annual data on nineteen industrial countries for the period 1979–2005 and a large number of controls, this article is the first to empirically study the impact of corporate taxes on the unemployment rate. In contrast to previous empirical research on the labor demand, investment and growth effects of corporate taxation, which consistently finds adverse effects, the regression results suggest that higher corporate taxes may have a favorable impact, lowering the unemployment rate. The magnitude of the estimated effect is substantial. The results of this study are robust to both endogeneity and numerous variations in specification.

Keywords: corporate tax; profit tax; unemployment (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (7)

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Working Paper: The Unemployment Puzzle of Corporate Taxation (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:39:y:2011:i:6:p:743-769

DOI: 10.1177/1091142111423019

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