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The general equilibrium effects of social security contributions under alternative incidence assumptions

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This study deals with the economic effects of a firm's social security taxes in the Catalan economy, using an applied general equilibrium model. A novel aspect of the analysis is that it hypothesizes about the incidence of firm's contributions on both employers and employees. The results of a reduction in firm's social security taxation are sensitive to the incidence assumption. In particular, the study shows that the effects on regional unemployment, income distribution and relative prices of factors depend considerably on the incidence hypothesis assumed.
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Document Type: Research Article

Affiliations: 1: Departament d'Economia Universitat Rovira i Virgili Avda. Universitat n° 1 43204 Reus Spain 2: Departament de Teoria Econòmica Universitat de Barcelona 08028 Barcelona Spain

Publication date: 01 October 2004

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