Reducing social contributions on unskilled labour as a way of fighting unemployment: An empirical evaluation for the case of Spain

Oscar Bajo-Rubio () and Antonio Gómez-Plana

No 102, Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra from Departamento de Economía - Universidad Pública de Navarra

Abstract: In this paper we provide an empirical evaluation of the effects of a cut in social security contributions (i) for all types of labour, and (ii) only for unskilled labour, within a computable general equilibrium model simulated for the Spanish economy. The model allows firms to follow a non-competitive price rule, and incorporates an equal yield assumption, which means that the reduction in social security contributions is compensated with an increase in value-added tax rates, so that the public sector deficit is not affected. In addition, the labour market is assumed to follow a matching unemployment rule, which allows to model in a simple way any frictions present in that market.

Keywords: Computable general equilibrium; unemployment; unskilled labour; social contributions. (search for similar items in EconPapers)
JEL-codes: D58 H20 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2001
New Economics Papers: this item is included in nep-pbe
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Reducing Social Contributions for Unskilled Labor as a Way of Fighting Unemployment: An Empirical Evaluation for the Case of Spain (2004)
Working Paper: Reducing social contributions on unskilled labour as a way of fighting unemployment: An empirical evaluation for the case of Spain
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