The Contribution of Payroll Taxation to Wage Inequality in France

Arbeitspapier

Over the 1967-2015 period, net wage inequality has decreased in France by 25%, in contrast to the significant increase experienced by most developed countries. Less well known is the fact that labor cost inequality has actually increased by 8% over the same period. We show that, (a) standard demand-side explanations for the rise in inequality apply in France when tested using measures of labor cost (as they should be); (b) reforms to payroll taxation, jointly with increases in the minimum wage, can explain a large part of the decrease in net wage inequality, in the context of increasing market inequality.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 13317

Classification and Topics

• Classification: Wirtschaft ; Education and Inequality ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Wage Level and Structure; Wage Differentials
• Subject: wage inequality ; labor cost ; payroll tax ; Social Security contributions ; tax incidence

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bozio, Antoine ; Breda, Thomas ; Guillot, Malka
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/223759
• Last update: 10.03.2025, 11:42 AM CET