Payroll Taxes and Firm Performance

Niklas Kaunitz and Johan Egebark

No 1175, Working Paper Series from Research Institute of Industrial Economics

Abstract: The Swedish employer paid payroll tax was reduced substantially for young workers in 2007, causing firms’ average social fees to depend on the age structure of their employees. Using pre-reform conditions to define treated and control firms, we show that the lower costs induced by the reduced taxes have no impact on exit rates or profitability. We find negligible effects on gross investments, and negative, but not statistically significant, effects on labor productivity.

Keywords: Payroll taxes; Labor costs; Profitability; Labor productivity; Investments; Windfall gain; Tax subsidy; Firm survival (search for similar items in EconPapers)
JEL-codes: D22 H22 J38 L25 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2017-06-20, Revised 2018-04-13
New Economics Papers: this item is included in nep-eff, nep-eur, nep-lma, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:1175

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