Empirical Macromodels Under Test : A Comparative Simulation Study of the Employment Effects of a Revenue Neutral Cut in Social Security Contributions

Buscher, Herbert S. ; Buslei, Hermann ; Göggelmann, Klaus ; Koschel, Henrike ; Ramb, Fred ; Schmidt, Tobias F. N. ; Steiner, Viktor ; Winker, Peter

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URL: https://ub-madoc.bib.uni-mannheim.de/655
URN: urn:nbn:de:bsz:180-madoc-6557
Document Type: Working paper
Year of publication: 1998
The title of a journal, publication series: Discussion Paper / ZEW
Volume: 98-40
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: C50 H55 C53 E17 ,
Subject headings (SWD): Simulation , Beschäftigungswirkung , Sozialversicherungsbeitrag
Abstract: In the paper we simulate a revenue-neutral cut in the social security contribution rate using five different types of macro- / microeconomic models, namely two models based on time-series data where the labour market is modelled basically demand oriented, two models of the class of computable equilibrium models which are supply oriented and finally a firm specific model for international tax burden comparisons. Our primary interest is in the employment effects the models predict due to the cut in the contribution rate. It turns out that qualitatively all models considered predict an increase in employment three years after the cut. But the employment effects differ considerably in magnitude, which follows immediately from the different behavioral assumptions underlying the different models.
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