Salle 3001

Etienne WASMER  (New York University Abu Dhabi ) “On the incidence neutrality of employer and employee social contributions, again ”

Abstract: In this paper, we revisit the widely held belief in the neutrality of the mix of social contributions (payroll taxes) paid by either party on employment and equilibrium wages. This paper discusses the conditions under which this is true. The theoretical conditions for neutrality are not met in modern labor markets, and non-neutrality is quantitatively relevant. This result holds regardless of other labor market frictions and does not rely on a specific wage mechanism. This non-neutrality has important implications for the design of welfare and workfare policies.

Joint work : Christian Alemán-Pericón, Raül Santaeulàlia-Llopis, Pranav Mimani