Guo Presents Payroll Tax Incidence: Evidence From Unemployment Insurance Today At Georgetown

Audrey Guo (Santa Clara; Google Scholar) presents Payroll Tax Incidence: Evidence from Unemployment Insurance at Georgetown today as part of its Tax Law and Public Finance Workshop hosted by Brian Galle:

Payroll taxes act as the primary source of social insurance financing throughout the world. Economic models assume that in the long run payroll tax burdens fall fully on workers, but where does tax incidence fall when taxes are firm-specific and time-varying? Unemployment insurance in the United States has the key feature of varying both across employers and over time, creating the potential for labor demand responses if tax costs cannot be fully passed on to worker wages. Using state variation in tax schedules and matched employer-employee job spells from the LEHD, I study how employment and earnings respond to payroll tax changes. I also focus on the impact to seasonal and part-time workers who bear a larger UI tax burden, and study both increases and decreases in tax costs, to provide a more comprehensive analysis of payroll tax incidence.

I also focus on the impact to seasonal and part-time workers who bear a larger UI tax burden, and study both increases and decreases in tax costs, to provide a more comprehensive analysis of payroll tax incidence.