The quintessence of the project were the questions to what extent changes in social security contributions affect labour costs and how the structure of the social security system has an impact on this relation. With contribution burdens expected to rise further, labour costs, the positioning of countries in international competition and, finally, employment will all depend decisively on the way changes in contributions are handled in the wage determination process. As theoretical work has shown, this may depend to a large extent on the design of the social security system. The amount of redistribution effects in social security systems and the level of tax and contribution rates in relation to workers' compensation could both be important in this respect. The principal database for the empirical investigation are national account statistics from the OECD member countries. From the results, we note substantial results in the degree of real wage resistance both across countries as well as across different kinds of contributions. For instance, direct taxes tend to influence labour costs more heavily than employers' social security contributions. Real wage resistance seems to be highest where the level of taxes and contribution rates is greatest. The tradtional view, based on incidence theory, that the burden of taxes and social security contributions falls exclusively on employees is rejected for most countries of the sample.

Selected Publications

Monographs, Contributions to Edited Volumes

Boockmann, Bernhard, Ralf-Henning Peters and Viktor Steiner (2001), Social Security, Real Wage Resistance and Employment in Sweden, the UK and West Germany, in: D. Milleker Frankfurter Institut, Stiftung Marktwirtschaft und Politik, Bad Homburg,.

Project duration

01.03.2000 - 30.09.2001

Cooperation partner

Dr. Margit Kraus, Forschungsbereich Unternehmensbesteuerung und Öffentliche Finanzwirtschaft, ZEW, Mannheim, DE