The Incidence of Payroll Taxes in Ontario and Quebec; Evidence from Collective Agreements for 1985-2007

Abstract:     
This study uses an original data set, combining information for all collective agreements covering more than 500 employees signed in Quebec or Ontario from 1985 to 2007 and information on payroll taxes and other variables, to measure the incidence of an increase in payroll tax. The results of this model show that that after one year, a one percentage point increase in the general payroll tax reduces wages growth by 1/2 of a percentage point in Quebec and 3/10 of a point in Ontario.

Keywords: Payroll Taxes, Iincidence, Collective Agreements, Wages

JEL Classification: H22, H24, H32, J32, J38

working papers series