Does Tax-Benefit Linkage Matter for the Incidence of Social Security Contributions?

We study the earnings responses to three large increases in employer Social Security contributions (SSCs) in France. We find evidence of full pass-through to workers in the case of a strong and salient relationship between contributions and expected benefits. By contrast, we find a limited pass-through of employer SSCs to wages for reforms that increased SSCs with no tax-benefit linkage. Together with a meta-analysis of the literature, we interpret these results as evidence that tax-benefit linkage and its salience matter for incidence, a claim long made by the literature but not backed by direct empirical evidence to date.

• Publication year

  2020

• Venue

  Social Science Research Network

• Publication date

  2020-04-01

• Fields of study

  Economics

• Identifiers
  DOI 10.2139/ssrn.3435377
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

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