Tax wedge on labour

Dolenc, Primož; Vodopivec, Milan

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Title:	Tax wedge on labour
Authors:	ID Dolenc, Primož (Author) ID Vodopivec, Milan (Author)
Files:	http://www.boeckler.de/pdf/v_2005_10_28_dolenc_vodopivec.pdf
Language:	English
Work type:	Not categorized
Typology:	1.08 - Published Scientific Conference Contribution
Organization:	UPR - University of Primorska
Abstract:	When taxes on labor are introduced the tax wedge between labor costs paid by employer (gross wage) and net wage received by employee appears. At a certain level of wage, higher tax wedge on labor increases unemployment and decreases employment, ceteris paribus. The paper tackles with thee main questions: characteristics of tax wedge on labor, unemployment and employment rate in OECD countries in near past, tax wedge on labor policy in EU15 and new EU members and tax system and its effects on unemployment and employment rate in Slovenia. We found that OECD countries can be classified in two groups of countries if tax wedge on labor, unemployment rate and employment rate are taken into consideration. First group is high tax wedge, high unemployment rate and low employment rate group of countries, whereas the other group has alternative characteristics. European member states (old and new) have on average higher tax burden on labor than OECD average, consequentlz suffering from higher unemployment rates. Slovenia has unreasonably high tax wedge on labor; in EU onlz Belgium and Germany have a higher tax burden. According to previous and our empirical findings we suggest that Slovenia could benefit from lowering tax wedge.
Keywords:	economic policy, tax wedge, Slovenia, European Union, OECD
Year of publishing:	2005
Number of pages:	15 str.
PID:	20.500.12556/RUP-2789
UDC:	330.1(497.4:4)
COBISS.SI-ID:	1479383
Publication date in RUP:	15.10.2013
Views:	5721
Downloads:	84
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