Μια εμπειρική διερεύνηση της επίδρασης των φόρων στην ανεργία σε δέκα (10) ευρωπαϊκές χώρες

Τάσσιος, Χρήστος

An empirical investigation of the impact of taxes on unemployment in ten (10) European countries

Master Thesis

Author

Τάσσιος, Χρήστος

Date

2017-09

Abstract

This master thesis analyzes the impact of taxes in unemployment in a sample of ten European countries studied between 1965 and 2015.The data used are panel data and the estimations were performed with the help of statistical package STaTa MP 13. Furthermore, the sample of the study includes years in which the global financial crisis took place, therefore an analysis of the impact of taxation on unemployment before and after the onset of this crisis with the help of a time dummy variable was conducted. Initially, the estimation methods applied are those of least squares (OLS), fixed effects and random effects. With the help of Breusch - Pagan and Hausman statistical tests, it was shown that the fixed effects method describes better the effect of taxation on unemployment. In particular, personal income taxes appear to be statistically significant and have a positive impact on the lack of employment. However, the above result differs with the use of time dummy variable, which divided the sample of this survey before and after the year in which global economic crisis occurred, i.e. before and after 2007. With the use of this dummy variable a change in the behavior of personal income tax was seen, since the given taxes had a negative influence on unemployment without losing their statistical significance. Due to the relatively small number of entities (country) and the fact that the estimated model was a dynamic model. i.e. a model that had as an independent variable the time lag of the dependent variable and in order to be checked more thoroughly the reliability of the results from the Robust Fixed Effects method, the model was also estimated using the Generalized Method of Moments (GMM). According to this method, it was once again proven that a strengthening of taxed on citizens' income is likely to increase the rate of unemployment in the years when each European economy is not facing a recession. On the other hand, during the years of economic downturn, personal income taxes have become inhibiting, since an increase is expected to lead to a decline in the rate of abstention from paid employment. In conclusion, the results of the survey show that the proper management of tax legislation is likely to bring a reduction in the unemployment rate. What need to be made clear is that the tax policy exercised by the governors is affected by the time and sometimes it can bring positive results and sometimes negative with regard to involuntary abstention from work. For this reason, the imposition of tax measures must be carried out with particular attention by each political leadership, especially in times of economic crisis and generally difficult economic conditions.

Postgraduate Studies Programme

Οικονομική και Επιχειρησιακή Στρατηγική

Department

Σχολή Οικονομικών, Επιχειρηματικών και Διεθνών Σπουδών. Τμήμα Οικονομικής Επιστήμης

Number of pages

184

Language

Greek

URI

https://dione.lib.unipi.gr/xmlui/handle/unipi/10790

Collections

Τμήμα Οικονομικής Επιστήμης

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