Labor Taxation in the Western Balkan: Looking Back and Forward
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Summary:
This paper examines how labor taxation (personal income taxes and social security contributions) in the Western Balkan contributes to labor market outcomes such as high informality and a significant gender gap in participation rates. We find that limited progressivity combined with high tax wedge on low incomes poses a major twin equity-efficiency challenge in the region, resulting in low redistributive capacity and inadequate incentives to enter the job market. Policy implications are discussed with a view to alleviating the excessively high tax wedges on low incomes, while improving progressivity of income taxation.
Series:
Working Paper No. 2022/239
Subject:
Labor Labor markets Labor taxes Personal income tax Tax policy Tax wedge Taxes Wages
Frequency:
regular
English
Publication Date:
December 2, 2022
ISBN/ISSN:
9798400227769/1018-5941
Stock No:
WPIEA2022239
Pages:
33
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