Work detail

The impact of tax-benefit system on the labour market

Author: Bc. Pavel Žofák
Year: 2014 - summer
Leaders: Mgr. Barbara Pertold-Gebicka M.A., Ph.D.
Work type: Bachelors
Language: English
Pages: 46
Awards and prizes:
Abstract: This thesis assesses the impact of taxes and unemployment benefits on the unem-
ployment rates. The aim of the thesis is to find determinants of tax-benefit system
which in uence the unemployment rate and how much they do so. This issue is
studied both theoretically and empirically. The empirical part is built on the panel
dataset of 28 OECD countries which covers the period between 2005 and 2012. The
main in uence on unemployment is ascribed to the labour taxes which drives the
wedge between the labour costs and the net income of the worker. On the other
hand, the consumption tax seems to be neutral in determining the unemployment
rates and the impact of benefit levels crucially depends on the way they are taxed
and on the eligibility criteria. Whole tax-benefit system impacts rather the long-
term unemployment rates than the overall unemployment


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