%0 Report
        %A Goerke, Laszlo
        %T Value-added Tax versus Social Security Contributions
        %D 1999
        %8 1999 Aug
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 55
        %U https://www.iza.org/publications/dp55
        %X In order to alleviate unemployment it is often recommended to reduce social security contributions (SSC) and to compensate for the ensuing loss in revenues by a rise in the value-added tax (VAT). Assuming unemployment to be caused by efficiency wages, it is shown that a balanced-budget shift from a payroll tax to a VAT will increase employment if the rise in the VAT does not alter consumer prices. If the effects of a shift from SSC to the VAT on the worker’s effort are neutralised, for example, by imposing a constant wedge, the employment impact will depend on the nature of the unemployment compensation system.
        %K Efficiency wages
%K social security contributions
%K unemployment
%K value-added tax