Artikel

Do payroll tax cuts boost formal jobs in developing countries?

Informal employment accounts for more than half of total employment in Latin America and the Caribbean, and an even higher percentage in Africa and South Asia. It is associated with lack of social insurance, low tax collection, and low productivity jobs. Lowering payroll taxes is a potential lever to increase formal employment and extend social insurance coverage among the labor force. However, the effects of tax cuts vary across countries, often resulting in large wage shifts but relatively small employment effects. Cutting payroll taxes requires levying other taxes to compensate for lost revenue, which may be difficult in developing economies.

Sprache
Englisch

Erschienen in
Journal: IZA World of Labor ; ISSN: 2054-9571 ; Year: 2017 ; Bonn: Institute for the Study of Labor (IZA)

Klassifikation
Wirtschaft
Taxation, Subsidies, and Revenue: General
Informal Labor Markets
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
Thema
payroll taxes
formal employment
wage shifts
developing countries

Ereignis
Geistige Schöpfung
(wer)
Pagés, Carmen
Ereignis
Veröffentlichung
(wer)
Institute for the Study of Labor (IZA)
(wo)
Bonn
(wann)
2017

DOI
doi:10.15185/izawol.345
Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

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Objekttyp

  • Artikel

Beteiligte

  • Pagés, Carmen
  • Institute for the Study of Labor (IZA)

Entstanden

  • 2017

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