Resumen de Visibility of social security contributions and employment
Iñigo Iturbe-Ormaetxe Cortajarena
In most countries employers and employees share the burden of social security contributions. According to standard incidence analysis, social security contributions a ect negatively employment, but it is irrelevant how they are split between employers and employees. The magnitude of the e ect depends only on the elasticities of labor demand and supply. Here I consider the possibility that: (i) workers perceive a linkage between contributions and future bene ts and, (ii) they discount more heavily employer�s contributions, because they are less \visible." Under these assumptions, I nd that employer�s contributions have a stronger (negative) e ect on employment than employee�s contributions. I also nd that making employer�s contributions more visible to workers has always a positive e ect on employment.
