36. Payroll and Income Taxes and Wage Inflation in Finland 1960-80

Mikael Ingberg. PAYROLL AND INCOME TAXES AND WAGE INFLATION IN FINLAND 1960-80. Raportteja ja artikkeleita 36. ISBN 951-9083-38-3, ISSN 0357-7384. In a recent article Holmlund (1983) tries to estimate the effect of the relatively fast increase in payroll taxes on the rate of wage inflation in Sweden. Since Holmlund's work offers a basically new labor-market equilibrium approach to estimating the shifting of the payroll taxes, previously mostly explored only from a demand side point of view, we will attempt to use this procedure on Finnish data. The main purpose of this report is to study in more detail whether the above assertion is reasonable and, it this is the case, how the shifting process actually takes place.