Do R&D tax incentives lead to higher wages for R&D workers? Evidence from the Netherlands

Boris Lokshin and Pierre Mohnen

No 2012-058, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: This paper examines the impact of the Dutch R&D tax incentive scheme on the wages of R&D workers. We construct firm specific R&D tax credit rates that vary over time following variations in the Dutch R&D tax incentive program. Using instrumental variables we estimate a wage-sharing model with an unbalanced firm-level panel data covering the period 1997-2004. The elasticity of the R&D wage with respect to the fraction of the wage supported by the fiscal incentives scheme is estimated at 0.2 in the short run and 0.24 in the long run.

Keywords: Research and Development; R&D; R&D workers; wages; tax incentives (search for similar items in EconPapers)
JEL-codes: C23 H25 J30 O32 O38 (search for similar items in EconPapers)
Date: 2012
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Journal Article: Do R&D tax incentives lead to higher wages for R&D workers? Evidence from The Netherlands (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2012058

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