Arbeitspapier

Payroll taxes, social insurance and business cycles

Payroll taxes represent a major distortionary influence of governments on labor markets. This paper examines the role of payroll taxation and the social safety net for cyclical fluctuations in a nonmonetary economy with labor market frictions and unemployment insurance, when the latter is only imperfectly related to search effort. A balanced social insurance budget renders gross wages more rigid over the cycle and, as a result, strengthens the model's endogenous propagation mechanism. For conventional calibrations, the model generates a negatively sloped Beveridge curve as well as substantial volatility and persistence of vacancies and unemployment.

Sprache
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 5150

Klassifikation
Wirtschaft
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Unemployment: Models, Duration, Incidence, and Job Search
Business Fluctuations; Cycles
Thema
business cycles
labor markets
payroll taxes
unemployment
consumption-tightness puzzle
Lohnsummensteuer
Steuerwirkung
Arbeitslosenversicherung
Konjunkturelle Arbeitslosigkeit
Arbeitsplatzsuchmodell
OECD-Staaten

Ereignis
Geistige Schöpfung
(wer)
Burda, Michael C.
Weder, Mark
Ereignis
Veröffentlichung
(wer)
Institute for the Study of Labor (IZA)
(wo)
Bonn
(wann)
2010

Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Burda, Michael C.
  • Weder, Mark
  • Institute for the Study of Labor (IZA)

Entstanden

  • 2010

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