Discussion Paper

No. 2016-32 | July 04, 2016
Effects of a Reduction in Employers’ Social Security Contributions: Evidence from Spain
(Published in Special Issue Recent Developments in Applied Economics)

Abstract

Programs to reduce employers’ social security contributions are being widely discussed in both the political arena and academic forums as tools for promoting economic growth and boosting employment. This paper employs a computable general equilibrium model to assess the economic impact on the national economy of the proposals from the Spanish Confederation of Enterprise Organizations about reducing the social security contributions paid by employers. The results show that the proposals fail to reduce unemployment when they are combined with compensation by revenues from indirect taxes; whereas compensation through increased personal income taxes shows positive results on unemployment in exchange for decreases in private consumption.

JEL Classification:

C68, H20, H32

Assessment

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Links

Cite As

Pilar Campoy-Muñoz, Manuel Alejandro Cardenete, M. Carmen Delgado, and Geoffrey J.D. Hewings (2016). Effects of a Reduction in Employers’ Social Security Contributions: Evidence from Spain. Economics Discussion Papers, No 2016-32, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2016-32


Comments and Questions


Anonymous - Referee Report 1
July 26, 2016 - 12:47

see attached file


Anonymous - Referee Report 2
July 27, 2016 - 08:05

see attached file


Campoy-Muñoz, Cardenete, Delgado and Hewings - Reply to Referee Reports
August 02, 2016 - 11:03

see attached file