A quantitative evaluation of payroll tax subsidies for low-wage workers:: An equilibrium search approach

• 成果类型: Article
• 署名作者: Cheron, Amaud; Hairault, Jean-Olivier; Langot, Francois
• 署名单位: Le Mans Universite; Universite Catholique de Lille; EDHEC Business School; Le Mans Universite; heSam Universite; Universite Pantheon-Sorbonne
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2007.09.012
• 发表日期: 2008
• 页码: 817-843
• 关键词: employment; PRODUCTIVITY; equilibrium search; Labor costs

摘要

Phelps [Phelps, E. (1994): Low-wage employment subsidies versus the welfare state, American Economic Review 84, 54-58.] presented the case for a low-wage subsidy policy. Since the mid-1990s, France has experimented with this strategy. This paper evaluates the effect of this policy on employment and also on output and welfare. We construct an equilibrium search model incorporating wage posting and specific human capital investment, where unemployment and the distribution of both wages and productivity are endogenous. We estimate this model using French data. Numerical simulations show that the prevailing minimum wage allows a high production level to be reached by increasing training investment, even though the optimal minimum wage is lower. We show that payroll tax subsidies enhance welfare more than a reduction in the minimum wage when they are spread over a large range of wages in order to avoid specialization in low productivity jobs. (c) 2007 Elsevier B.V. All rights reserved.