Original scientific paper
https://doi.org/10.1080/1331677X.2018.1456359
Tax policy and labour market in Croatia: effects of tax wedge on employment
Milan Deskar-Škrbić
; Economic Research Department, Erste & Steiermarkische Bank, Zagreb, Croatia
Saša Drezgić
; Faculty of Economics Rijeka, University of Rijeka, Rijeka, Croatia
Hrvoje Šimović
; Faculty of Economics and Business Zagreb, University of Zagreb, Zagreb, Croatia
Abstract
In this paper we empirically test the importance and the effects of
labour taxation on employment in Croatia. The motivation for this
analytical inquiry stems from the fact that Croatia is one of the
countries with the lowest employment rates in the European Union
while at the same time it has relatively high labour tax burden
compared to peers and ranks among the countries with most negative
perceived effects of taxation on incentives to work. As fiscal policy
is the main economic policy instrument in Croatia, it is important
to analyse whether fiscal measures can directly affect labour market
performance. Our results show that tax policy has significant effect
on employment in Croatia which has important policy implications.
Keywords
Tax policy; labour market; Croatia; V.A.R. model
Hrčak ID:
206102
URI
Publication date:
3.12.2018.
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