The unemployment puzzle of corporate taxation

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

Using annual data on nineteen industrial countries for the period 1979–2005 and a large number of controls, this article is the first to empirically study the impact of corporate taxes on the unemployment rate. In contrast to previous empirical research on the labor demand, investment and growth effects of corporate taxation, which consistently finds adverse effects, the regression results suggest that higher corporate taxes may have a favorable impact, lowering the unemployment rate. The magnitude of the estimated effect is substantial. The results of this study are robust to both endogeneity and numerous variations in specification.
Original languageEnglish
Pages (from-to)743-769
Number of pages27
JournalPublic Finance Review
Volume39
Issue number6
DOIs
Publication statusPublished - Nov 2011

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