Centre for Tax Policy and Administration


Taxation and Employment

This publication examines the effects of taxation on employment, highlights the resulting policy challenges, and discusses the ways governments endeavour to address these challenges.  Chapter 1 provides a broad overview of the effects of taxation on employment, examining how taxes on labour income can affect both the size of the labour force and the level of unemployment, and highlighting key areas of concern for tax policy makers.  This analysis is then augmented in chapters 2-4 by the more detailed analysis of the effects of taxation on the employment of three groups where empirical research suggests that responses of labour supply to taxation may be relatively large: low-income workers, mobile highly-skilled workers, and older workers.  As well as highlighting key areas of concern for tax policy makers, the report places a particular focus on the different measures that have been adopted by countries to attempt to overcome these problems, discussing, where possible, the main design features, and the advantages and disadvantages of the different approaches that have been adopted.

Published on October 12, 2011

In series:OECD Tax Policy Studiesview more titles


Executive Summary
The Effects of Taxation on Employment
The Taxation of Low-Income Workers
The Taxation of Older Workers
The Taxation of Mobile High-Skilled Workers
Annex A Additional Labour Force and Tax Burden Information
Annex B Additional Retirement Incentive Modelling Results
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