Michael Neumann
This paper applies a test for the incidence of social security contributions based on the reaction of gross wages in response to a variation in social security contributions. Exploiting an increase of the East German taxable maximum of health insurance, a difference-in-differences approach is used to estimate its effects on yearly changes in gross wages. It is shown that employees earning somewhat less than the taxable maximum represent a valid control goup. Based on the resulting confidence interval bounds of burden shifting supported by the data are calculated. I find that considerable shifting in any direction can be rejected.
Themen: Arbeit und Beschäftigung
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