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Seminar in Economics | Firm Heterogeneity and the Impact of Payroll Taxes with Daniel Prinz

Department of Economics welcomes you to a seminar with Daniel Prinz, Institute for Fiscal Studies, presenting "Firm Heterogeneity and the Impact of Payroll Taxes." We study the impact of a large payroll tax cut for both younger and older workers in Hungary. The results point to important heterogeneity in the incidence of payroll tax subsidies by firm type and highlight that payroll taxes can change the composition of jobs in the labor market.

Welcome to this Higher Seminar in Economics organised by the Department of Economics, SSE. The seminar speaker is Daniel Prinz, Country Programme Manager for Ethiopia at the Institute for Fiscal Studies. Daniel will present "Firm Heterogeneity and the Impact of Payroll Taxes."

Abstract

We study the impact of a large payroll tax cut for both younger and older workers in Hungary. Motivated by the prediction of standard equilibrium job search models we also examine the heterogeneous impact of the policy by firm quality. Employment increases most at low-productivity firms, which tend to hire from unemployment, while the effects are more muted for high-productivity firms, especially for older workers. At the same time, we find a significant increase in wages for older workers at highproductivity firms. These results point to important heterogeneity in the incidence of payroll tax subsidies by firm type and highlight that payroll taxes can change the composition of jobs in the labor market.

Daniel Prinz is a Research Economist and Country Programme Manager for Ethiopia in the Centre for Tax Analysis in Developing Countries at the Institute for Fiscal Studies. His research covers topics in public finance, including social insurance, taxation, and inequality.

This seminar takes place online via Zoom.

Please contact kristen.pendleton@hhs.se if you would like to attend the webinar or have other questions.

Dept. of Economics Labor Economics Seminar in economics