Corporate income tax and wages : a meta-regression analysis

We apply meta-regression analysis to quantitatively review the growing empirical tax incidence literature that indicates a substantial shift of the corporate income tax burden on employees. While most studies report large negative elasticities, our findings suggest that estimates with positive values are published less often than they should. After accounting for publication bias, we estimate an average wage elasticity to corporate taxes of -0.024. Our average estimate of the semi-elasticity suggests that the tax incidence effect on wages is economically small: A 1%-point increase in CIT rates is associated with a decline in wages of only 0.110% to 0.235%. Moreover, we find that the data coverage, the temporal focus and the average sample year drive the heterogeneity among estimates. Additional analyses indicate that a robust true negative association only exists for within-country studies focusing on the rent-sharing mechanism to identify the corporate tax incidence.