Calendrier du 26 octobre 2017
Macroeconomics Seminar
Du 26/10/2017 de 15:30 à 16:45
PSE - 48 boulevard Jourdan, 75014 Paris - salle R2-21
AGHION Philippe (Collège de France)
*Missing Growth from Creative Destruction
écrit avec Antonin Bergeaud, Timo Boppar,t Peter J. Klenow, Huiyu Li
Travail et économie publique externe
Du 26/10/2017 de 12:30 à 13:45
SEIM David (Stockholm University)
Payroll Taxes, Firm Behavior, and Rent Sharing: Evidence from a Young Workers Tax Cut in Sweden
This paper uses administrative data to analyze a large and long-lasting employer payroll tax rate cut from 31% down to 15% for young workers (aged 26 or less) in Sweden. We find a zero effect on net-of-tax wages of young treated workers relative to slightly older untreated workers, even in the medium run (after six years). Simple graphical cohort analysis shows compelling positive effects on the employment rate of the treated young workers, of about 2--3 percentage points, which arise primarily from fewer separations (rather than more hiring). These employment effects are larger in places with initially higher youth unemployment rates. We also analyze the firm-level effects of the tax cut. We trace out graphically the time series of outcomes of firms by their persistent share of treated young workers just before the reform, to which the tax cut windfall is proportionate. First, heavily treated firms expand after the reform: employment, capital, sales, value added, and profits all increase. These effects appear stronger in credit-constrained firms, consistent with liquidity effects. Second, heavily treated firms increase the wages of all their workers -- young as well as old -- collectively, perhaps through rent sharing. Wages of low paid workers rise more in percentage terms. Rather than canonical market-level adjustment, we uncover a crucial role of firm-level mechanisms in the transmission of payroll tax cuts.