Payroll taxes, capital grants and Irish unemployment

Frank Barry

No 19894PP, Working Papers from School of Economics, University College Dublin

Abstract: This paper explores the role of factor prices in macroeconomic models which embody the frequently-encountered Classical, Keynesian, and Structuralist perspectives on the caused of Irish unemployment. It is argued that within each framework a strong case can be made for at least partial repleacement of the current IDA capital-grants scheme by a policy of payroll-tax reductions for newly-created jobs. Various objections to this type of proposal have been raised in the literature, and these are dealt with here on a point-by-point basis. A range of estimates is given for the likely employment effects and exchequer costs of the proposed policy.

Keywords: Unemployment--Ireland; Employment (Economic theory); Subsidies--Ireland (search for similar items in EconPapers)
Date: 1989-07
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http://hdl.handle.net/10197/1379 First version, 1989 (application/pdf)

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