The Contribution of Payroll Taxation to Wage Inequality in France

49 Pages Posted: 9 Jun 2020

See all articles by Antoine Bozio

Antoine Bozio

Institute for Fiscal Studies (IFS)

Thomas Breda

Banque de France

Malka Guillot

ETH Zürich - Department of Humanities, Social and Political Sciences (GESS)

Abstract

Over the 1967-2015 period, net wage inequality has decreased in France by 25%, in contrast to the significant increase experienced by most developed countries. Less well known is the fact that labor cost inequality has actually increased by 8% over the same period. We show that, (a) standard demand-side explanations for the rise in inequality apply in France when tested using measures of labor cost (as they should be); (b) reforms to payroll taxation, jointly with increases in the minimum wage, can explain a large part of the decrease in net wage inequality, in the context of increasing market inequality.

Keywords: wage inequality, labor cost, payroll tax, Social Security contributions, tax incidence

JEL Classification: I24, J24, J31

Suggested Citation

Bozio, Antoine and Breda, Thomas and Guillot, Malka, The Contribution of Payroll Taxation to Wage Inequality in France. IZA Discussion Paper No. 13317, Available at SSRN: https://ssrn.com/abstract=3620632 or http://dx.doi.org/10.2139/ssrn.3620632

Antoine Bozio (Contact Author)

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

HOME PAGE: http://www.ifs.org.uk

Thomas Breda

Banque de France ( email )

Paris
France

Malka Guillot

ETH Zürich - Department of Humanities, Social and Political Sciences (GESS) ( email )

ETH-Zentrum SEW E 26
CH-8092 Zurich, Zurich 8006
Switzerland

HOME PAGE: http://https://malkaguillot.weebly.com/

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
33
Abstract Views
238
PlumX Metrics