The Impact of Payroll Taxes on Informality : The Case of the 2012 Colombian Tax Reform

In 2012, the Colombian Government reduced employer payroll contributions from 29.5 to 16.0 percent. Two years later, the informality rate had diminished by about 4.0 per-centage points. This paper attempts to estimate how much of this reduction was due to the...

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Autores Principales: Villar, Leonardo, Fernández, Cristina
Otros Autores: The Economics of Informality Conference 2018
Formato: Objeto de conferencia (Conference Object)
Lenguaje:Inglés (English)
Publicado: Universidad del Rosario. Facultad de Economía 2018
Materias:
Acceso en línea:http://repository.urosario.edu.co/handle/10336/18257
id ir-10336-18257
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spelling ir-10336-182572019-09-19T12:37:54Z The Impact of Payroll Taxes on Informality : The Case of the 2012 Colombian Tax Reform Villar, Leonardo Fernández, Cristina The Economics of Informality Conference 2018 Mercados informales Impuestos sobre la nómina Diferencia en las diferencias Teoría de búsqueda y emparejamiento Finanzas públicas Economía informal Impuestos a los salarios Congresos, conferencias, etc. Informal markets Payroll taxes Matching Difference-in-differences In 2012, the Colombian Government reduced employer payroll contributions from 29.5 to 16.0 percent. Two years later, the informality rate had diminished by about 4.0 per-centage points. This paper attempts to estimate how much of this reduction was due to the tax reform, isolating the impact of other macroeconomic variables. A natural approach to perform-ing this task is to apply a difference-in-differences methodology using a household survey panel. Since the Colombian survey does not have a panel structure, we simulated one using a matching difference-in-differences methodology. According to the results, the tax reform is associated with a 4.8-percentage-point decrease in the informality of workers affected by the reform in the thirteen main metropolitan areas. This represents approximately half the reduction of the relevant informality rate during that period, affecting mostly salaried men and workers in general with low levels of education. 2018-05-28 2018-08-03T16:11:58Z info:eu-repo/semantics/conferenceObject info:eu-repo/semantics/publishedVersion http://repository.urosario.edu.co/handle/10336/18257 eng Atribución-NoComercial-CompartirIgual 2.5 Colombia http://creativecommons.org/licenses/by-nc-sa/2.5/co/ info:eu-repo/semantics/openAccess application/pdf Universidad del Rosario. Facultad de Economía instname:Universidad del Rosario reponame:Repositorio Institucional EdocUR
institution EdocUR - Universidad del Rosario
collection DSpace
language Inglés (English)
topic Mercados informales
Impuestos sobre la nómina
Diferencia en las diferencias
Teoría de búsqueda y emparejamiento
Finanzas públicas
Economía informal
Impuestos a los salarios
Congresos, conferencias, etc.
Informal markets
Payroll taxes
Matching
Difference-in-differences
spellingShingle Mercados informales
Impuestos sobre la nómina
Diferencia en las diferencias
Teoría de búsqueda y emparejamiento
Finanzas públicas
Economía informal
Impuestos a los salarios
Congresos, conferencias, etc.
Informal markets
Payroll taxes
Matching
Difference-in-differences
Villar, Leonardo
Fernández, Cristina
The Impact of Payroll Taxes on Informality : The Case of the 2012 Colombian Tax Reform
description In 2012, the Colombian Government reduced employer payroll contributions from 29.5 to 16.0 percent. Two years later, the informality rate had diminished by about 4.0 per-centage points. This paper attempts to estimate how much of this reduction was due to the tax reform, isolating the impact of other macroeconomic variables. A natural approach to perform-ing this task is to apply a difference-in-differences methodology using a household survey panel. Since the Colombian survey does not have a panel structure, we simulated one using a matching difference-in-differences methodology. According to the results, the tax reform is associated with a 4.8-percentage-point decrease in the informality of workers affected by the reform in the thirteen main metropolitan areas. This represents approximately half the reduction of the relevant informality rate during that period, affecting mostly salaried men and workers in general with low levels of education.
author2 The Economics of Informality Conference 2018
author_facet The Economics of Informality Conference 2018
Villar, Leonardo
Fernández, Cristina
format Objeto de conferencia (Conference Object)
author Villar, Leonardo
Fernández, Cristina
author_sort Villar, Leonardo
title The Impact of Payroll Taxes on Informality : The Case of the 2012 Colombian Tax Reform
title_short The Impact of Payroll Taxes on Informality : The Case of the 2012 Colombian Tax Reform
title_full The Impact of Payroll Taxes on Informality : The Case of the 2012 Colombian Tax Reform
title_fullStr The Impact of Payroll Taxes on Informality : The Case of the 2012 Colombian Tax Reform
title_full_unstemmed The Impact of Payroll Taxes on Informality : The Case of the 2012 Colombian Tax Reform
title_sort impact of payroll taxes on informality : the case of the 2012 colombian tax reform
publisher Universidad del Rosario. Facultad de Economía
publishDate 2018
url http://repository.urosario.edu.co/handle/10336/18257
_version_ 1645142081523417088
score 12,131701