IDEAS home Printed from https://ideas.repec.org/a/bla/jecsur/v38y2024i3p852-876.html
   My bibliography  Save this article

Wage response to corporate income taxes: A meta‐regression analysis

Author

Listed:
  • Jonas Knaisch
  • Carla Pöschel

Abstract

The wage elasticity to corporate income tax (CIT) is an essential parameter for assessing tax policy reforms. This paper applies meta‐regression analysis to quantitatively review the growing empirical tax incidence literature that indicates a substantial shift of the tax burden onto employees. While most studies report a large wage‐reducing effect of the CIT, our findings suggest that estimates with positive values are published less often than they should. After accounting for the bias, we find no significant average association between wage rates and corporate taxation. We document that the tax variable, econometric method, type of tax variation, and underlying time and country coverage of studies drive the heterogeneity among reported effects. The implied best‐practice estimates suggest that the tax elasticity of wages is systematically larger for emerging countries and smaller when tax changes at the subnational level are exploited.

Suggested Citation

  • Jonas Knaisch & Carla Pöschel, 2024. "Wage response to corporate income taxes: A meta‐regression analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 38(3), pages 852-876, July.
  • Handle: RePEc:bla:jecsur:v:38:y:2024:i:3:p:852-876
    DOI: 10.1111/joes.12557
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/joes.12557
    Download Restriction: no

    File URL: https://libkey.io/10.1111/joes.12557?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jecsur:v:38:y:2024:i:3:p:852-876. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0950-0804 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.