The Swedish payroll tax reduction for young workers : - A study of effects found using publicly available aggregated (macro) data

University essay from Umeå universitet/Nationalekonomi

Abstract: In 2007, the Swedish payroll tax was reduced for youths in an attempt to suppress the perceived high unemployment among Swedish youths. The reform was rolled back later in 2016. For this period there is a rich supply of publicly available aggregated (macro) data. This thesis aims to examine: first, if the aggregated data is suitable for policy evaluation of the reform, and second, the effects of the reform introduction and repeal. This has been done by using both a conventional fixed effects model and a more unorthodox synthetic control method. Neither of the two methods could show any unbiased and consistent significant result of the treatment effects of the reform. Instead, the results of this thesis suggest that the publicly available aggregated data doesn’t contain enough information to evaluate such reforms.

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