Economics, Econometrics and Finance
4 years ago

Payroll tax hikes drive firms to cut low-skilled jobs and boost productivity.

1 view
Using Payroll Tax Variation to Unpack the Black Box of Firm-Level Production
Youssef Benzarti, Jarkko Harju

Paper Summary

Payroll taxes impact how businesses operate. When these taxes go up, companies hire fewer low-skilled workers and invest less. Instead, they hire more skilled workers and become more efficient. Higher payroll taxes don't affect how much employees earn.

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