The impact of differential payroll | tax subsidies on minimum wage employment

• 成果类型: Article
• 署名作者: Kramarz, F; Philippon, T
• 署名单位: Centre National de la Recherche Scientifique (CNRS); Institut Polytechnique de Paris; ENSAE Paris; Massachusetts Institute of Technology (MIT)
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(00)00137-7
• 发表日期: 2001
• 页码: 115-146
• 关键词: Minimum wage; total labor costs; tax subsidies

摘要

In this article, we study the impact of changes of total labor costs on employment of low-wage workers in France in a period, 1990 to 1998, that saw sudden and large changes in these costs. We use longitudinal data from the French Labor Force survey (much less than enquete emploi much greater than) in order to understand the consequences of real decreases and real increases of the labor cost. We examine the transition probabilities from employment to non-employment and from non-employment to employment. In particular, we compare the transition probabilities of the workers that were directly affected by the changes (between workers) with the transition probabilities of workers closest in the wage distribution to those directly affected (marginal workers). In all years with an increasing minimum cost, the between group (or the treated using the vocabulary of controlled experiments) comprises all workers whose costs in year t lie between the old (year t) and the new (year t + 1) minimum. In all years with a decreasing minimum, the between group comprises all workers whose costs in year t + 1 lie between the present minimum cost (year t + 1) and the old (year t) minimum cost. The results can be summarized as follows. Comparing years of increasing minimum cost and decreasing minimum cost, difference-in-difference estimates imply that an increase of 1% of the cost implies roughly an increase of 1.5% in the probability of transiting from employment to non-employment for the treated workers, the resulting elasticity being -1.5. Second, results for the transitions from non-employment to employment are less clear-cut. Tax subsidies have a small and insignificant impact on entry from non-employment as well as on transitions within the wage distribution. Finally, we show that the marginal group constitutes a good control group. In addition, there is no obvious evidence of substitution between the between and marginal groups of workers, but there is some evidence of substitution between workers within the tax subsidy zone, with wages above those of the marginal, and workers outside the subsidy zone. (C) 2001 Elsevier Science B.V. All rights reserved.