Budget and Employment Effects of a Change in the Payroll tax : For the manufacturing sector

by Östberg, Anders; Syk, Niklas

Abstract (Summary)
This thesis is examining the effects of a decrease in the payroll tax and the responding effect on the state budget. The emphasis is on the change in the number of employments for the manufacturing sector as a result of a decrease in the payroll tax. In order to analyze the effect a decrease in payroll tax has on employment, the elasticity of labor demand has been calculated. The result of this regression is significant, and therefore it can be concluded that a change in the payroll tax will have an effect on employment in the manufacturing sector. Since elasticity of labor demand is inelastic, the change in payroll tax will have a small impact on employment. The results of various surveys conducted in other countries are consistent with the findings of this thesis.
Bibliographical Information:


School:Högskolan i Jönköping

School Location:Sweden

Source Type:Master's Thesis

Keywords:payroll tax


Date of Publication:04/10/2008

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