Social Security Contributions and the Business Cycle

Michael Burda, Anna Almosova and Simon Voigts

No 12096, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper examines magnitudes and business cycle dynamics of social security contributions (SSC). In most OECD countries studied, we document a negative covariation of payroll tax burdens with GDP and GDP growth at business cycle and lower frequencies. We assess the overall magnitude of the distortion following Barro and Redlick (2011). For most countries, average marginal SSC tax rates exceed average rates, but the latter tracks the former tightly. Changes in average payroll tax burdens are mostly accounted for by changes in tax schedules rather than shifts in the earnings distribution over time. For many countries, SSC rates behave like estimated values of the “labor wedge†(Chari et al. 2007, Brinca et al., 2016).

Keywords: Business cycle; Payroll tax; Social security contributions; Labor wedge (search for similar items in EconPapers)
JEL-codes: E24 E32 H55 J32 (search for similar items in EconPapers)
Date: 2017-06
New Economics Papers: this item is included in nep-age, nep-lma, nep-mac and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP12096 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Social Security Contributions and the Business Cycle (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:12096

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP12096

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().