Taxing the Gender Gap: Labor Market Effects of a Payroll Tax Cut for Women in Italy

Publication Date


Grant Type

Early Career Research Award


Does the government have the power to curb gender inequalities in the labor market? This project studies the labor market impacts of a large payroll tax cut for hiring unemployed women in Italy. The empirical approach combines rich matched employer-employee data with cross-municipality, cross-cohort and cross-profession discontinuities in exposure to the payroll tax cut generated by the 2012 reform. These discontinuities are bound to improve female labor market outcomes in contexts where gender attitudes are still traditional. The empirical analysis will proceed in two steps. First, I will study the effects of the policy on several individual-level labor market outcomes, including wages, labor force participation, job duration and time spent on welfare. Second, I will take a firm-level perspective to analyze the effect of the payroll tax cut on business growth and firm performance.