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The impact of social security contributions on earnings: Evidence from administrative data in France, Germany, the Netherlands and the UK
This project aims to provide new evidence on the effects of social security contributions (SSCs) on earnings in France, Germany, the Netherlands and the UK. The research will exploit large administrative datasets in each country that span several decades and track the same individuals over time: these data have never before been used in cross-country analysis and offer the potential to advance our understanding substantially.
The research will address two related questions:
- the effects of SSCs on individuals’ and firms’ behaviour (labour supply and labour demand)
- the economic incidence of SSCs (ie who bears the burden of them in the form of lower net income).
The research will try to distinguish between short-run and long-run effects, look for differences according to whether it is the employee or the employer who is nominally liable for the tax and whether variations in SSCs are linked to variations in benefit entitlements, and explore the institutional features that might affect these impacts. Looking at different countries and time periods will help to shed light on all of this, but the project will also involve using several different methodologies to analyse the earnings data and examining what can be learned from the different approaches.