European Financial and Accounting Journal 2018, 13(2):45-57 | DOI: 10.18267/j.efaj.209

Labour Taxation and its Effect on Employment Growth: Latest Estimations with Focus on the Czech Republic

Lucie Kábelová1, Ondřej Bayer2
1 University of Economics, Prague, Faculty of Finance and Accounting, Department of Public Finance, W. Churchill Sq. 4, 130 67 Prague 3, Czech Republic.
2 University of Economics, Prague, Faculty of Finance and Accounting, Department of Public Finance, W. Churchill Sq. 4, 130 67 Prague 3, Czech Republic.

The paper aims to assess effects of the tax wedge on the employment rate in the Czech Republic. To investigate the impact of the tax wedge on the employment growth, we used a one-equation cointegration model based on the Engle-Granger theorem on OECD data. The results are surprising, because of an unexpected positive relationship between endogenous and exogenous variables. The paper itself is divided into five main parts. The first part is an introduction to the topic and a review of the literature, the second part is on data, the third part is on the statistical methodology and the last two parts cover results and the final conclusion.

Keywords: Personal income tax, Tax wedge, Employment growth
JEL classification: H24, J30, J38

Published: September 1, 2018  Show citation

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Kábelová, L., & Bayer, O. (2018). Labour Taxation and its Effect on Employment Growth: Latest Estimations with Focus on the Czech Republic. European Financial and Accounting Journal13(2), 45-57. doi: 10.18267/j.efaj.209
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