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The hidden cost of corporate tax cuts: Evidence from worker health in China

Author

Listed:
  • He, Fan
  • Zeng, Xin
  • Xue, Jingwen
  • Xu, Jianbin

Abstract

Despite extensive research on the impact of corporate tax cuts on firm-level outcomes, their effects on worker health have yet to be examined. This study aims to address this research gap by utilizing individual-level panel data from the China Family Panel Studies between 2010 and 2018, and by exploiting exogenous shock in the corporate effective tax burden stemming from accelerated depreciation. Our results yield three key findings: first, that corporate tax cuts significantly reduce worker health; second, that this effect may be driven by increased working hours and poor health behaviors; third, that corporate tax cuts exacerbate health inequalities based on gender, education level, executive positions, and employed company. These findings shed light on the wider implications of tax incentives for corporate investment and contribute to stimulating interest in the welfare of workers in a global wave of tax cuts.

Suggested Citation

  • He, Fan & Zeng, Xin & Xue, Jingwen & Xu, Jianbin, 2024. "The hidden cost of corporate tax cuts: Evidence from worker health in China," China Economic Review, Elsevier, vol. 86(C).
  • Handle: RePEc:eee:chieco:v:86:y:2024:i:c:s1043951x24000919
    DOI: 10.1016/j.chieco.2024.102202
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    More about this item

    Keywords

    Corporate tax cuts; Worker health; Health inequality; Accelerated depreciation;
    All these keywords.

    JEL classification:

    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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