The Effect of the Swedish Payroll Tax Cut for Youths on Firm Profitability
Payroll taxes in Sweden were reduced substantially for people ages 26 years or younger on July 1, 2007. The objective of this tax cut was to lower youth unemployment. The question of how gains from payroll taxes are distributed between workers and...
| Main Authors: | , , , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/10/26854133/effect-swedish-payroll-tax-cut-youths-firm-profitability http://hdl.handle.net/10986/25299 |
| Summary: | Payroll taxes in Sweden were reduced
substantially for people ages 26 years or younger on July 1,
2007. The objective of this tax cut was to lower youth
unemployment. The question of how gains from payroll taxes
are distributed between workers and owners of firms has been
the focus of considerable theoretical and empirical
attention. This paper examines the impact of the Swedish
reform on firm profits using individual-level and firm-level
microdata. Previous investigations into the effects of this
particular reform have focused entirely on the effects on
employment and wages, or have been limited to the retail
sector. This paper finds that the reform was not associated
with a general increase in firm profitability, but that
there is some evidence of a positive effect on profits in
the retail and wholesale sector. |
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