Tax Incentives and Job Creation in the Tourism Industry of Brazil

Grégoire Garsous (), David Corderi and Mercedes Velasco

No 7324, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: In recent decades, a significant number of developing countries have implemented fiscal incentives programs for the tourism industry as part of their regional development policies. The main objective of these programs is to increase local investment and employment, as tourism activities are labor intensive. Little evidence is available, however, to assess the effect of these policies on job creation. This paper analyzes a fiscal incentives program that the Brazilian federal government introduced in 2002 to develop the tourism industry in the undeveloped region of Northeast Brazil. It provides evidence that income tax credits had a significant positive effect on job creation. We find that local employment in the tourism industry was on average 34 percent higher in those municipalities that benefited from the program.

JEL-codes: H25 H71 L83 R58 Z00 (search for similar items in EconPapers)
Date: 2015-11
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Citations: View citations in EconPapers (1)

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Working Paper: Tax Incentives and Job Creation in the Tourism Industry of Brazil (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:7324

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