The effects of a natural experiment in taxation – a reduction of payroll taxes for youth (but not for older employees) during 2007–2009 – are investigated for a particular industry, namely retail. The project considers effects on the number of employees, work hours, and wages. Effects on wages per hour (instead of wage bill per employee) and hours have not been considered in the previous literature. Effects on hours may be important in service industries that typically employ workers on a part-time basis.
The project was financed by a research grant from The Institute for Evaluation of Labour Market and Education Policy (IFAU).