How to Measure the Tax Burden on Labour at the Macro-Level?

33 Pages Posted: 19 Jun 2003

See all articles by Jakob de Haan

Jakob de Haan

University of Groningen - Faculty of Economics and Business; De Nederlandsche Bank; CESifo (Center for Economic Studies and Ifo Institute)

Jan-Egbert Sturm

KOF Swiss Economic Institute, ETH Zurich; CESifo (Center for Economic Studies and Ifo Institute)

Bjorn Volkerink

University of Maastricht (formerly University of Limburg)

Date Written: June 2003

Abstract

The purpose of this paper is threefold. First, we survey the way in which the tax burden on labour has been proxied for in recent multi-country macro-economic studies. Second, we critically evaluate these proxies. Finally, we examine to what extent the conclusions of some studies change if some alternative indicator for the tax burden on labour is employed. We conclude that the widely used tax ratios as developed by Mendoza et al. (1994) may not be very reliable. The choice of the indicator for the tax burden on labour is also shown to affect the conclusions of some well-known empirical models.

Keywords: Tax Ratios, Labour, Average Effective Tax Rates, Unemployment

JEL Classification: H20, H29

Suggested Citation

de Haan, Jakob and Sturm, Jan-Egbert and Volkerink, Bjorn, How to Measure the Tax Burden on Labour at the Macro-Level? (June 2003). CESifo Working Paper Series No. 963. Available at SSRN: https://ssrn.com/abstract=417347

Jakob de Haan (Contact Author)

University of Groningen - Faculty of Economics and Business ( email )

PO Box 800
Groningen, 9700 AV
Netherlands
+31 0 50 3633706 (Fax)

De Nederlandsche Bank ( email )

P.O. Box 98
Amsterdam, 1000 AB
Netherlands

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Jan-Egbert Sturm

KOF Swiss Economic Institute, ETH Zurich ( email )

Zurich
Switzerland

HOME PAGE: http://www.kof.ethz.ch

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, 81679
Germany

HOME PAGE: http://www.cesifo.de

Bjorn Volkerink

University of Maastricht (formerly University of Limburg) ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

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