Is there a social security tax wedge?

descriptionPublicationkeyboard_double_arrow_right Article , Other literature type , Research , Preprint 01 Jan 2006 Italy English Publisher:Elsevier BVJournal:Labour Economics, volume 15, pages 68-77 (issn: 0927-5371,

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Authors: CIGNO, ALESSANDRO;

doi: 10.1016/j.labeco.2006.11.003 , 10.2139/ssrn.882825

handle: 10419/25817 , 10419/33220 , 2158/250966

Is there a social security tax wedge?

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Abstract

A Beveridgean pension scheme invariably introduces a wedge between the wage rate and the marginal take-home pay. A Bismarckian one can do so only if it is not actuarially fair, or in the presence of credit rationing. Interestingly, if the two possible sources of distortion are present at the same time, they will tend to offset each other. The distortion may even change sign (the wedge may become a premium). In any case, the same pension contribution will discourage labour less if the scheme is Bismarckian, than if it is Beveridgean.

Country

Italy

Related Organizations

Institute for the Study of Labor
Germany
University of Florence
Italy

Keywords

tax wedge, Bismarck, Beveridge, public pensions, implicit pension tax, labour, J38, ddc:330, tax wedge, labour, public pensions, Bismarck, Beveridge, implicit pension tax, implicit pension tax, tax wedge; labour; public pensions; Beveridge; Bismarck; implicit pension tax; credit rationing, Beveridge, public pensions, labour, H31, Bismarck, H55, tax wedge, jel: jel:H55, jel: jel:H31, jel: jel:J38

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