Author (Corporate) | European Commission: DG Economic and Financial Affairs |
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Series Title | European Economy: Economic Papers |
Series Details | No.183, April 2003 |
Publication Date | April 2003 |
ISBN | 92-894-5623-X |
EC | KC-AI-03-004-EN-C |
Content Type | Journal | Series | Blog, Report |
This paper analyses the effect of labour taxes on Euro area unemployment. Empirical estimates obtained so far can be criticised as being spurious because the regressions generally lack non-measurable variables constituting the reservation wage that can possibly be non stationary. Here we overcome this problem by using an unobserved component model. For the Euro area unemployment, we find a significant tax effect that is in the middle of the estimates that can be found in the empirical literature. This study gives support to the view that lowering labour taxes can help to reduce unemployment in continental Europe. |
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Source Link | http://ec.europa.eu/economy_finance/publications/publication_summary916_en.htm |
Related Links |
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Subject Categories | Employment and Social Affairs |
Countries / Regions | Europe |
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