difference in higher marginal tax rates on wages, relative to lower rates on fringe benefits, induces a reallocation of the total … compensation package toward fringe benefits. Firm-level panel data on employee total compensation and wages across all industries … my most conservative estimate, I find that an increase in fringe-tax by 1 percentage point increases wages by one percent …

after the start of the experiment. According to our results, the reduction in the payroll-taxes led to an increase in wages … in the target region. The point estimates indicate that the increase in wages offset roughly half of the impact of the …