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The Finnish payroll tax cut experiment revisited

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  • Korkeamäki, Ossi
Abstract
In this paper I evaluate the effects of a regional experiment that reduced payroll taxes by 3–6 percentage points of the firms' wage sum in northern and eastern Finland. I estimate the effect of the payroll tax reduction on firms' employment levels, wage sum and profits, and on workers' hourly pay and monthly hours worked, by comparing the changes in employment and wages before and after the start of the experiment to a control region. My results indicate that the reduction in payroll taxes did not lead to any unequivocal aggregate effects in the target region.

Suggested Citation

  • Korkeamäki, Ossi, 2011. "The Finnish payroll tax cut experiment revisited," Working Papers 22, VATT Institute for Economic Research.
    • Handle: RePEc:fer:wpaper:22
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    File URL: https://www.doria.fi/handle/10024/148761
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    References listed on IDEAS

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    Cited by:

    1. Skedinger, Per, 2014. "Effects of Payroll Tax Cuts for Young Workers," Working Paper Series 1031, Research Institute of Industrial Economics.

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