Details

Autor(en) / Beteiligte

• Benzarti, Youssef
• Harju, Jarkko

Titel

Using Payroll Tax Variation to Unpack the Black Box of Firm-Level Production

Ist Teil von

• Journal of the European Economic Association, 2021-10, Vol.19 (5), p.2737-2764

Ort / Verlag

Oxford University Press

Erscheinungsjahr

2021

Link zum Volltext

Quelle

Business Source Ultimate

Beschreibungen/Notizen

• Abstract This paper uses quasi-experimental variation in payroll tax rates in Finland to investigate how firms use their input factors. We find that higher payroll tax rates lead to large employment responses and have no effects on employee-level earnings. As payroll taxes increase, firms substitute away from low-skilled, routine, and manual workers. Higher firm-level payroll tax rates also slightly decrease the total output of firms. Our results imply that firm-level production and input factor choices are clearly affected by payroll taxes.