PAYROLL TAXES AND THE LABOR MARKET: A COMPUTABLE GENERAL EQUILIBRIUM ANALYSIS

PAYROLL TAXES AND THE LABOR MARKET: A COMPUTABLE GENERAL EQUILIBRIUM ANALYSIS

This study uses a computable general equilibrium model to analyze the effects of eliminating Colombia's parafiscal taxes, which finance social programs. In the model, these are substituted by alternative financing sources: VAT, indirect taxes or taxes on capital. The results show that eliminati...

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Autor principal: Hernández,Gustavo
Lenguaje:English
Publicado: Pontificia Universidad Católica de Chile. Instituto de Economía. 2012
Materias:
Payroll taxes
applied general equilibrium
tax replacement
Acceso en línea:http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332012000100004
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spelling oai:scielo:S0719-043320120001000042013-10-15PAYROLL TAXES AND THE LABOR MARKET: A COMPUTABLE GENERAL EQUILIBRIUM ANALYSISHernández,Gustavo Payroll taxes applied general equilibrium tax replacement This study uses a computable general equilibrium model to analyze the effects of eliminating Colombia's parafiscal taxes, which finance social programs. In the model, these are substituted by alternative financing sources: VAT, indirect taxes or taxes on capital. The results show that elimination of parafiscal taxes produces a one percentage point decrease in the unemployment rate, as long as these are not substituted by other taxes. However, when other taxes are substituted for parafiscal taxes, there may not be any effect on the unemployment rate. This implies that eliminating parafiscal taxes does not produce the effects expected by a partial equilibrium analysis, that is, a significant reduction in the unemployment rate.info:eu-repo/semantics/openAccessPontificia Universidad Católica de Chile. Instituto de Economía.Latin american journal of economics v.49 n.1 20122012-05-01text/htmlhttp://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332012000100004en10.4067/S0719-04332012000100004
institution Scielo Chile
collection Scielo Chile
language English
topic Payroll taxes
applied general equilibrium
tax replacement
spellingShingle Payroll taxes
applied general equilibrium
tax replacement
Hernández,Gustavo
PAYROLL TAXES AND THE LABOR MARKET: A COMPUTABLE GENERAL EQUILIBRIUM ANALYSIS
description This study uses a computable general equilibrium model to analyze the effects of eliminating Colombia's parafiscal taxes, which finance social programs. In the model, these are substituted by alternative financing sources: VAT, indirect taxes or taxes on capital. The results show that elimination of parafiscal taxes produces a one percentage point decrease in the unemployment rate, as long as these are not substituted by other taxes. However, when other taxes are substituted for parafiscal taxes, there may not be any effect on the unemployment rate. This implies that eliminating parafiscal taxes does not produce the effects expected by a partial equilibrium analysis, that is, a significant reduction in the unemployment rate.
author Hernández,Gustavo
author_facet Hernández,Gustavo
author_sort Hernández,Gustavo
title PAYROLL TAXES AND THE LABOR MARKET: A COMPUTABLE GENERAL EQUILIBRIUM ANALYSIS
title_short PAYROLL TAXES AND THE LABOR MARKET: A COMPUTABLE GENERAL EQUILIBRIUM ANALYSIS
title_full PAYROLL TAXES AND THE LABOR MARKET: A COMPUTABLE GENERAL EQUILIBRIUM ANALYSIS
title_fullStr PAYROLL TAXES AND THE LABOR MARKET: A COMPUTABLE GENERAL EQUILIBRIUM ANALYSIS
title_full_unstemmed PAYROLL TAXES AND THE LABOR MARKET: A COMPUTABLE GENERAL EQUILIBRIUM ANALYSIS
title_sort payroll taxes and the labor market: a computable general equilibrium analysis
publisher Pontificia Universidad Católica de Chile. Instituto de Economía.
publishDate 2012
url http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332012000100004
work_keys_str_mv AT hernandezgustavo payrolltaxesandthelabormarketacomputablegeneralequilibriumanalysis
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