LABOR TAXATION AND INVESTMENT IN DEVELOPED COUNTRIES. THE IMPACT ON EMPLOYMENT 

19 Pages Posted: 17 Jun 2024

See all articles by Theodore Pelagidis

Theodore Pelagidis

University of Piraeus; Brookings Institution

Michael S. Mitsopoulos

Hellenic Federation of Enterprises

Date Written: December 31, 2021

Abstract

One of the main topics highlighted in the field of economic policy applications is the impact of taxation on labor. In an era in which macroeconomic stability, technological change and globalization pressure the job market, there exists no strong consensus in the literature on how exactly taxation influences growth, choice between work and leisure, share of income attributed to labor or participation in different job market segments. Focusing on employment levels and using the results of the World Economic Forum (WEF) executive opinion survey (EOS) between 2013-2017 we bypass several challenges often faced in the literature. By doing so, we complement the insights of the existing literature by establishing that, in institutionally mature countries, taxation that is deemed by a survey of business executives to pose a disincentive to work, reduces employment. At the same time, such countries can also rely on the taxation of investment and the flexibility of wages to influence employment levels, unlike less competitive countries.

Keywords: Employment, Taxation of Labor, Non-wage Labor Costs, Executive Opinion Survey JEL classification: J21, H24, J32, M52

Suggested Citation

Pelagidis, Theodore and Mitsopoulos, Michael S., LABOR TAXATION AND INVESTMENT IN DEVELOPED COUNTRIES. THE IMPACT ON EMPLOYMENT  (December 31, 2021). Available at SSRN: https://ssrn.com/abstract=4859574 or http://dx.doi.org/10.2139/ssrn.4859574

Theodore Pelagidis (Contact Author)

University of Piraeus ( email )

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Brookings Institution ( email )

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Michael S. Mitsopoulos

Hellenic Federation of Enterprises ( email )

Xenofontos str 5
Athens, 10557
Greece
2106722694 (Phone)

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