Reducing social contributions on unskilled labour as a way of fighting unemployment: an empirical evaluation for the case of Spain
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Fecha
2001Versión
Acceso abierto / Sarbide irekia
Tipo
Documento de trabajo / Lan gaiak
Impacto
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nodoi-noplumx
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Resumen
In this paper we provide an empirical evaluation of the effects of a cut in social security contributions (i) for all types of labour, and (ii) only for unskilled labour, within a computable general equilibrium model simulated for the Spanish economy. The model allows firms to follow a non-competitive price rule, and incorporates an equal yield assumption, which means that the reduction in social ...
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In this paper we provide an empirical evaluation of the effects of a cut in social security contributions (i) for all types of labour, and (ii) only for unskilled labour, within a computable general equilibrium model simulated for the Spanish economy. The model allows firms to follow a non-competitive price rule, and incorporates an equal yield assumption, which means that the reduction in social security contributions is compensated with an increase in value-added tax rates, so that the public sector deficit is not affected. In addition, the labour market is assumed to follow a matching unemployment rule, which allows to model in a simple way any frictions present in that market. [--]
Materias
Computable general equilibrium,
Unemployment,
Unskilled labour,
Social contributions
Serie
Documentos de Trabajo DE - ES Lan Gaiak /
0102
Departamento
Universidad Pública de Navarra. Departamento de Economía /
Nafarroako Unibertsitate Publikoa. Ekonomia Saila
Entidades Financiadoras
The authors would like to thank the Spanish Ministry of Education for financial support under the Project PB98-0546-C02-01.