This paper provides the first quasi-experimental estimate of the micro capital-labor elasticity of substitution. We use a discontinuity in the average payroll tax rate to show that firms decrease both labor and capital when experiencing higher payroll tax rates. We argue that this is consistent...

This paper estimates the effects of payroll taxes on workers and firms. Using temporary and long-lasting payroll tax cuts across different municipalities in Finland and rich firm-level data, we find that payroll taxes affect wages at larger firms but not at medium-sized and smaller firms. These...

This paper estimates the effect of payroll tax cuts on firm-level employment and balance-sheet outcomes during economic downturns. We use two regional payroll tax cuts in Finland as well as the onset of the Great Recession to estimate the effect of the recession on firms treated by the payroll...

This paper estimates the effect of payroll tax cuts on firm-level employment and balance-sheet outcomes during economic downturns. We use two regional payroll tax cuts in Finland as well as the onset of the Great Recession to estimate the effect of the recession on firms treated by the payroll...

This paper estimates the effect of payroll tax cuts on firm activity during economic downturns. We use two regional payroll tax cuts in Finland as well as the onset of the Great Recession to estimate the effect of the recession on firms treated by the payroll tax cuts compared to a similar...

This paper estimates the effect of payroll tax cuts on firm activity during economic downturns. We use two regional payroll tax cuts in Finland as well as the onset of the Great Recession to estimate the effect of the recession on firms treated by the payroll tax cuts compared to a similar...