Wage and Employment Effects of Payroll Taxes and Investment Subsidies

F. Johansen and Tor Klette

Memorandum from Oslo University, Department of Economics

Abstract: Using a set of panel data for manufacturing plants we study how payrll taxes and investment subsidies affect wages and demand for labor and capital. We exploit changes in the regional subsidy schemes for labor anf capital in Norway. Our empirical analysis finds that a large part of changes in payroll taxes is shifted over to wages. This result suggests that changes in payroll taxes have a limited direct effect on employment.

Keywords: WAGES; LABOUR MARKET; TAXATION (search for similar items in EconPapers)
JEL-codes: E24 H25 (search for similar items in EconPapers)
Pages: 21 pages
Date: 1998
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Citations: View citations in EconPapers (7)

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Working Paper: Wage and Employment Effects of Payroll Taxes and Investment Subsidies (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:osloec:1998_027

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