Lower payroll taxes for young workers : Was the introduction of the payroll tax reductions for young employees an effective way to lower youth unemployment?

This thesis studies the effects on the unemployment rate and average income due to the payroll tax cuts for young workers in Sweden. The method that has been used is a difference-in-difference approach with two different control groups. The unemployment rate for Swedish individuals at age 15-24 has...

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Main Author:	Johansson, Carolina
Format:	Others
Language:	English
Published:	Linnéuniversitetet, Institutionen för nationalekonomi och statistik (NS) 2016
Subjects:	Payroll taxes youth unemployment difference-in-differences proposition 2006/07:84 proposition 2008/09:7
Online Access:	http://urn.kb.se/resolve?urn=urn:nbn:se:lnu:diva-53512

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spelling	ndltd-UPSALLA1-oai-DiVA.org-lnu-535122016-06-17T05:14:30ZLower payroll taxes for young workers : Was the introduction of the payroll tax reductions for young employees an effective way to lower youth unemployment?engJohansson, CarolinaLinnéuniversitetet, Institutionen för nationalekonomi och statistik (NS)2016Payroll taxesyouth unemploymentdifference-in-differencesproposition 2006/07:84proposition 2008/09:7This thesis studies the effects on the unemployment rate and average income due to the payroll tax cuts for young workers in Sweden. The method that has been used is a difference-in-difference approach with two different control groups. The unemployment rate for Swedish individuals at age 15-24 has been matched towards individuals at the same age in Finland and Denmark. The data behind the estimations is picked from the database of Eurostat. The results indicate an increase in the unemployment rate, contrary to the expectations from the theoretical framework in the subject. One possible explanation for a lack of increase in employment due to a targeted tax cut is shifting, meaning that the lowered cost for firms is shifted onto the employees’ wages. However, no significant results on the wage effect were found, so no such conclusion can be made. The explanation could lay in modeling problems, a growing labor force or the supply of labor (which may choose other alternatives than employment). By the results of this report, the main conclusion is that the payroll tax reductions did not reduce the high unemployment rate among young individuals in Sweden. Student thesisinfo:eu-repo/semantics/bachelorThesistexthttp://urn.kb.se/resolve?urn=urn:nbn:se:lnu:diva-53512application/pdfinfo:eu-repo/semantics/openAccess
collection	NDLTD
language	English
format	Others
sources	NDLTD
topic	Payroll taxes youth unemployment difference-in-differences proposition 2006/07:84 proposition 2008/09:7
spellingShingle	Payroll taxes youth unemployment difference-in-differences proposition 2006/07:84 proposition 2008/09:7 Johansson, Carolina Lower payroll taxes for young workers : Was the introduction of the payroll tax reductions for young employees an effective way to lower youth unemployment?
description	This thesis studies the effects on the unemployment rate and average income due to the payroll tax cuts for young workers in Sweden. The method that has been used is a difference-in-difference approach with two different control groups. The unemployment rate for Swedish individuals at age 15-24 has been matched towards individuals at the same age in Finland and Denmark. The data behind the estimations is picked from the database of Eurostat. The results indicate an increase in the unemployment rate, contrary to the expectations from the theoretical framework in the subject. One possible explanation for a lack of increase in employment due to a targeted tax cut is shifting, meaning that the lowered cost for firms is shifted onto the employees’ wages. However, no significant results on the wage effect were found, so no such conclusion can be made. The explanation could lay in modeling problems, a growing labor force or the supply of labor (which may choose other alternatives than employment). By the results of this report, the main conclusion is that the payroll tax reductions did not reduce the high unemployment rate among young individuals in Sweden.
author	Johansson, Carolina
author_facet	Johansson, Carolina
author_sort	Johansson, Carolina
title	Lower payroll taxes for young workers : Was the introduction of the payroll tax reductions for young employees an effective way to lower youth unemployment?
title_short	Lower payroll taxes for young workers : Was the introduction of the payroll tax reductions for young employees an effective way to lower youth unemployment?
title_full	Lower payroll taxes for young workers : Was the introduction of the payroll tax reductions for young employees an effective way to lower youth unemployment?
title_fullStr	Lower payroll taxes for young workers : Was the introduction of the payroll tax reductions for young employees an effective way to lower youth unemployment?
title_full_unstemmed	Lower payroll taxes for young workers : Was the introduction of the payroll tax reductions for young employees an effective way to lower youth unemployment?
title_sort	lower payroll taxes for young workers : was the introduction of the payroll tax reductions for young employees an effective way to lower youth unemployment?
publisher	Linnéuniversitetet, Institutionen för nationalekonomi och statistik (NS)
publishDate	2016
url	http://urn.kb.se/resolve?urn=urn:nbn:se:lnu:diva-53512
work_keys_str_mv	AT johanssoncarolina lowerpayrolltaxesforyoungworkerswastheintroductionofthepayrolltaxreductionsforyoungemployeesaneffectivewaytoloweryouthunemployment
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Lower payroll taxes for young workers : Was the introduction of the payroll tax reductions for young employees an effective way to lower youth unemployment?

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