Using a Difference-in-Differences approach we evaluate the effects of a 10 percentage points reduction in the payroll tax introduced in 2002 for firms in the northern part of Sweden. We find no employment effects for existing firms and can rule out that a 1 percentage point payroll tax reduction...

Cuts in payrolls taxes as a regional support measure is used throughout Europe. In this study we address some of the shortcomings in previous evaluations. A first shortcoming concerns expected outcomes. Most evaluation focus employment impacts and there are from previous research few indications...

The paper investigates the relationship between labor taxation and unemployment in Sweden by estimating a labor market model that includes a wage-setting locus and labor demand and supply relationships. The study simulates the effect of a 1 percentage point increase in the payroll tax and in...