Estimating the Impact of Labor Taxes on Employment and the Balances of the Social Insurance Funds in Turkey
High labor tax wedges and slow formal employment growth have combined to make labor tax reform an important economic policy issue in Turkey. This synthesis report presents the results of a series of empirical studies of the impact of a labor tax re...
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| Format: | Report |
| Language: | English en_US |
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World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/167581468311115427/Estimating-the-impact-of-labor-taxes-on-employment-and-the-balances-of-the-social-insurance-funds-in-Turkey http://hdl.handle.net/10986/28211 |
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okr-10986-282112021-04-23T14:04:46Z Estimating the Impact of Labor Taxes on Employment and the Balances of the Social Insurance Funds in Turkey World Bank ACTIVE LABOR ACTIVE LABOR MARKET ACTIVE LABOR MARKET PROGRAMS ADJUSTMENT PROCESS AGGREGATE EMPLOYMENT AVERAGE WAGE BARGAINING BARGAINING POWER COMPETITIVE LABOR MARKETS CONSUMPTION TAX CONTRIBUTION RATE DEADWEIGHT DEADWEIGHT LOSS DEADWEIGHT LOSSES DISCUSSIONS DOWNWARD BIAS EARNING ECONOMIC GROWTH EMPLOYEE EMPLOYER CONTRIBUTION EMPLOYER CONTRIBUTIONS EMPLOYERS EMPLOYMENT EMPLOYMENT CREATION EMPLOYMENT EFFECT EMPLOYMENT EFFECTS EMPLOYMENT GROWTH EMPLOYMENT IMPACT EMPLOYMENT IMPACTS EMPLOYMENT INCREASES EMPLOYMENT LEVEL EMPLOYMENT LEVELS EMPLOYMENT MODELS EMPLOYMENT ORGANIZATION EMPLOYMENT PERFORMANCE EMPLOYMENT PROBABILITIES EMPLOYMENT RATE EMPLOYMENT RATES EMPLOYMENT STATUS EMPLOYMENT SUBSIDIES EMPLOYMENT SUBSIDY EMPLOYMENT TAXES ENERGY SUBSIDIES FEMALE EMPLOYMENT GROSS WAGE GROSS WAGES HEALTH INSURANCE HIRING INCOME INCOME TAX INFORMAL EMPLOYMENT INFORMAL SECTOR JOB CREATION JOBS LABOR COMPENSATION LABOR COST LABOR COSTS LABOR DEMAND LABOR DEMAND ELASTICITIES LABOR DEMAND ELASTICITY LABOR FORCE LABOR MARKET LABOR MARKET INSTITUTIONS LABOR MARKET POLICIES LABOR MARKETS LABOR SUPPLY LOW-WAGE EMPLOYMENT MANUFACTURING INDUSTRIES MANUFACTURING INDUSTRY MINIMUM WAGE MINIMUM WAGES NET EMPLOYMENT NET EMPLOYMENT EFFECT NET EMPLOYMENT IMPACT NET EMPLOYMENT IMPACTS OLDER WORKERS OUTPUTS PAYROLL TAX PAYROLL TAXES PERSONAL INCOME TAXES POLITICAL ECONOMY PRESENT ANALYSIS PREVIOUS ONE PREVIOUS SECTION PRIVATE SECTOR PRODUCTION WAGE PRODUCTION WORKERS PROGRAM DESIGN REAL WAGE SERVICE SECTOR SOCIAL BENEFITS SOCIAL SECURITY STAFF SUBSIDIZATION SUBSIDIZED EMPLOYMENT SUBSIDIZED JOB SUBSIDIZED JOBS SUBSTITUTION EFFECTS TAX BASE TAX CHANGES TAX CREDIT TAX CREDITS TAX CUTS TAX INCIDENCE TAX LAW TAX RATE TAX RATES TAX REDUCTION TAX REDUCTIONS TAX REFORM TAX REFORMS TAX SUBSIDIES TAX SUBSIDY TAX SYSTEM TAX WEDGE TAX WEDGES TAXATION TEMPORARY EMPLOYMENT TOTAL EMPLOYMENT TOTAL WAGE TRADE UNIONS UNEMPLOYMENT UNEMPLOYMENT BENEFITS UNEMPLOYMENT INSURANCE UNEMPLOYMENT INSURANCE FUND UNEMPLOYMENT INSURANCE FUNDS UNEMPLOYMENT RATE WAGE EMPLOYMENT WAGE LEVEL WAGE LEVELS WAGE RATE WAGE SECTOR WAGE SUBSIDY WAGE SUBSIDY SCHEME WORKER WORKERS YOUNG WORKERS High labor tax wedges and slow formal employment growth have combined to make labor tax reform an important economic policy issue in Turkey. This synthesis report presents the results of a series of empirical studies of the impact of a labor tax reform. The analysis was undertaken before the social contribution reforms that were introduced as part of the 2008 employment package. Using data from firms, households, and social insurance files, the research finds that employment does respond to changes in labor costs at levels that are comparable to those found in other middle-income and Organization for Economic Co-operation and Development (OECD) countries. The results show that reducing labor costs could significantly boost registered employment. However, the actual effect of lower taxes on employment would be diluted because a significant portion of the reduced tax will be captured by workers through higher wages rather than by employers through lower labor costs. As a result, tax cuts targeted towards low-wage labor would be more cost-effective than across-the-board reductions. To achieve overall fiscal neutrality, compensating additional revenues from other sources or reduced expenditures will be needed to accompany lower contribution rates. 2017-09-07T20:30:29Z 2017-09-07T20:30:29Z 2009-04 Report http://documents.worldbank.org/curated/en/167581468311115427/Estimating-the-impact-of-labor-taxes-on-employment-and-the-balances-of-the-social-insurance-funds-in-Turkey http://hdl.handle.net/10986/28211 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Economic & Sector Work :: Other Social Protection Study Economic & Sector Work Europe and Central Asia Turkey |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACTIVE LABOR ACTIVE LABOR MARKET ACTIVE LABOR MARKET PROGRAMS ADJUSTMENT PROCESS AGGREGATE EMPLOYMENT AVERAGE WAGE BARGAINING BARGAINING POWER COMPETITIVE LABOR MARKETS CONSUMPTION TAX CONTRIBUTION RATE DEADWEIGHT DEADWEIGHT LOSS DEADWEIGHT LOSSES DISCUSSIONS DOWNWARD BIAS EARNING ECONOMIC GROWTH EMPLOYEE EMPLOYER CONTRIBUTION EMPLOYER CONTRIBUTIONS EMPLOYERS EMPLOYMENT EMPLOYMENT CREATION EMPLOYMENT EFFECT EMPLOYMENT EFFECTS EMPLOYMENT GROWTH EMPLOYMENT IMPACT EMPLOYMENT IMPACTS EMPLOYMENT INCREASES EMPLOYMENT LEVEL EMPLOYMENT LEVELS EMPLOYMENT MODELS EMPLOYMENT ORGANIZATION EMPLOYMENT PERFORMANCE EMPLOYMENT PROBABILITIES EMPLOYMENT RATE EMPLOYMENT RATES EMPLOYMENT STATUS EMPLOYMENT SUBSIDIES EMPLOYMENT SUBSIDY EMPLOYMENT TAXES ENERGY SUBSIDIES FEMALE EMPLOYMENT GROSS WAGE GROSS WAGES HEALTH INSURANCE HIRING INCOME INCOME TAX INFORMAL EMPLOYMENT INFORMAL SECTOR JOB CREATION JOBS LABOR COMPENSATION LABOR COST LABOR COSTS LABOR DEMAND LABOR DEMAND ELASTICITIES LABOR DEMAND ELASTICITY LABOR FORCE LABOR MARKET LABOR MARKET INSTITUTIONS LABOR MARKET POLICIES LABOR MARKETS LABOR SUPPLY LOW-WAGE EMPLOYMENT MANUFACTURING INDUSTRIES MANUFACTURING INDUSTRY MINIMUM WAGE MINIMUM WAGES NET EMPLOYMENT NET EMPLOYMENT EFFECT NET EMPLOYMENT IMPACT NET EMPLOYMENT IMPACTS OLDER WORKERS OUTPUTS PAYROLL TAX PAYROLL TAXES PERSONAL INCOME TAXES POLITICAL ECONOMY PRESENT ANALYSIS PREVIOUS ONE PREVIOUS SECTION PRIVATE SECTOR PRODUCTION WAGE PRODUCTION WORKERS PROGRAM DESIGN REAL WAGE SERVICE SECTOR SOCIAL BENEFITS SOCIAL SECURITY STAFF SUBSIDIZATION SUBSIDIZED EMPLOYMENT SUBSIDIZED JOB SUBSIDIZED JOBS SUBSTITUTION EFFECTS TAX BASE TAX CHANGES TAX CREDIT TAX CREDITS TAX CUTS TAX INCIDENCE TAX LAW TAX RATE TAX RATES TAX REDUCTION TAX REDUCTIONS TAX REFORM TAX REFORMS TAX SUBSIDIES TAX SUBSIDY TAX SYSTEM TAX WEDGE TAX WEDGES TAXATION TEMPORARY EMPLOYMENT TOTAL EMPLOYMENT TOTAL WAGE TRADE UNIONS UNEMPLOYMENT UNEMPLOYMENT BENEFITS UNEMPLOYMENT INSURANCE UNEMPLOYMENT INSURANCE FUND UNEMPLOYMENT INSURANCE FUNDS UNEMPLOYMENT RATE WAGE EMPLOYMENT WAGE LEVEL WAGE LEVELS WAGE RATE WAGE SECTOR WAGE SUBSIDY WAGE SUBSIDY SCHEME WORKER WORKERS YOUNG WORKERS |
| spellingShingle |
ACTIVE LABOR ACTIVE LABOR MARKET ACTIVE LABOR MARKET PROGRAMS ADJUSTMENT PROCESS AGGREGATE EMPLOYMENT AVERAGE WAGE BARGAINING BARGAINING POWER COMPETITIVE LABOR MARKETS CONSUMPTION TAX CONTRIBUTION RATE DEADWEIGHT DEADWEIGHT LOSS DEADWEIGHT LOSSES DISCUSSIONS DOWNWARD BIAS EARNING ECONOMIC GROWTH EMPLOYEE EMPLOYER CONTRIBUTION EMPLOYER CONTRIBUTIONS EMPLOYERS EMPLOYMENT EMPLOYMENT CREATION EMPLOYMENT EFFECT EMPLOYMENT EFFECTS EMPLOYMENT GROWTH EMPLOYMENT IMPACT EMPLOYMENT IMPACTS EMPLOYMENT INCREASES EMPLOYMENT LEVEL EMPLOYMENT LEVELS EMPLOYMENT MODELS EMPLOYMENT ORGANIZATION EMPLOYMENT PERFORMANCE EMPLOYMENT PROBABILITIES EMPLOYMENT RATE EMPLOYMENT RATES EMPLOYMENT STATUS EMPLOYMENT SUBSIDIES EMPLOYMENT SUBSIDY EMPLOYMENT TAXES ENERGY SUBSIDIES FEMALE EMPLOYMENT GROSS WAGE GROSS WAGES HEALTH INSURANCE HIRING INCOME INCOME TAX INFORMAL EMPLOYMENT INFORMAL SECTOR JOB CREATION JOBS LABOR COMPENSATION LABOR COST LABOR COSTS LABOR DEMAND LABOR DEMAND ELASTICITIES LABOR DEMAND ELASTICITY LABOR FORCE LABOR MARKET LABOR MARKET INSTITUTIONS LABOR MARKET POLICIES LABOR MARKETS LABOR SUPPLY LOW-WAGE EMPLOYMENT MANUFACTURING INDUSTRIES MANUFACTURING INDUSTRY MINIMUM WAGE MINIMUM WAGES NET EMPLOYMENT NET EMPLOYMENT EFFECT NET EMPLOYMENT IMPACT NET EMPLOYMENT IMPACTS OLDER WORKERS OUTPUTS PAYROLL TAX PAYROLL TAXES PERSONAL INCOME TAXES POLITICAL ECONOMY PRESENT ANALYSIS PREVIOUS ONE PREVIOUS SECTION PRIVATE SECTOR PRODUCTION WAGE PRODUCTION WORKERS PROGRAM DESIGN REAL WAGE SERVICE SECTOR SOCIAL BENEFITS SOCIAL SECURITY STAFF SUBSIDIZATION SUBSIDIZED EMPLOYMENT SUBSIDIZED JOB SUBSIDIZED JOBS SUBSTITUTION EFFECTS TAX BASE TAX CHANGES TAX CREDIT TAX CREDITS TAX CUTS TAX INCIDENCE TAX LAW TAX RATE TAX RATES TAX REDUCTION TAX REDUCTIONS TAX REFORM TAX REFORMS TAX SUBSIDIES TAX SUBSIDY TAX SYSTEM TAX WEDGE TAX WEDGES TAXATION TEMPORARY EMPLOYMENT TOTAL EMPLOYMENT TOTAL WAGE TRADE UNIONS UNEMPLOYMENT UNEMPLOYMENT BENEFITS UNEMPLOYMENT INSURANCE UNEMPLOYMENT INSURANCE FUND UNEMPLOYMENT INSURANCE FUNDS UNEMPLOYMENT RATE WAGE EMPLOYMENT WAGE LEVEL WAGE LEVELS WAGE RATE WAGE SECTOR WAGE SUBSIDY WAGE SUBSIDY SCHEME WORKER WORKERS YOUNG WORKERS World Bank Estimating the Impact of Labor Taxes on Employment and the Balances of the Social Insurance Funds in Turkey |
| geographic_facet |
Europe and Central Asia Turkey |
| description |
High labor tax wedges and slow formal
employment growth have combined to make labor tax reform an
important economic policy issue in Turkey. This synthesis
report presents the results of a series of empirical studies
of the impact of a labor tax reform. The analysis was
undertaken before the social contribution reforms that were
introduced as part of the 2008 employment package. Using
data from firms, households, and social insurance files, the
research finds that employment does respond to changes in
labor costs at levels that are comparable to those found in
other middle-income and Organization for Economic
Co-operation and Development (OECD) countries. The results
show that reducing labor costs could significantly boost
registered employment. However, the actual effect of lower
taxes on employment would be diluted because a significant
portion of the reduced tax will be captured by workers
through higher wages rather than by employers through lower
labor costs. As a result, tax cuts targeted towards low-wage
labor would be more cost-effective than across-the-board
reductions. To achieve overall fiscal neutrality,
compensating additional revenues from other sources or
reduced expenditures will be needed to accompany lower
contribution rates. |
| format |
Report |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
Estimating the Impact of Labor Taxes on Employment and the Balances of the Social Insurance Funds in Turkey |
| title_short |
Estimating the Impact of Labor Taxes on Employment and the Balances of the Social Insurance Funds in Turkey |
| title_full |
Estimating the Impact of Labor Taxes on Employment and the Balances of the Social Insurance Funds in Turkey |
| title_fullStr |
Estimating the Impact of Labor Taxes on Employment and the Balances of the Social Insurance Funds in Turkey |
| title_full_unstemmed |
Estimating the Impact of Labor Taxes on Employment and the Balances of the Social Insurance Funds in Turkey |
| title_sort |
estimating the impact of labor taxes on employment and the balances of the social insurance funds in turkey |
| publisher |
World Bank, Washington, DC |
| publishDate |
2017 |
| url |
http://documents.worldbank.org/curated/en/167581468311115427/Estimating-the-impact-of-labor-taxes-on-employment-and-the-balances-of-the-social-insurance-funds-in-Turkey http://hdl.handle.net/10986/28211 |
| _version_ |
1764465796796383232 |