Template-type: ReDIF-Paper 1.0
Author-Name: Lokshin, Boris
Author-Email: lokshin@merit.unu.edu
Author-Workplace-Name: UNU-MERIT
Author-Name: Mohnen, Pierre
Author-Email: mohnen@merit.unu.edu
Author-Workplace-Name: UNU-MERIT
Title: Wage effects of R&D tax incentives:Evidence from the Netherlands
Abstract: This paper examines the impact of the Dutch R&D tax incentives program, 
	 known as WBSO, on the wages of R&D workers. In our model these wages are 
	 partly determined by the governments WBSO tax disbursements. We 
	 construct detailed firm- and time specific R&D tax credit rates as a 
	 function of the R&D tax incentives scheme to capture the wage effects of 
	 the government R&D support. An instrumentalvariables econometric model 
	 is estimated using an unbalanced firm-level panel data covering the 
	 period 1996-2004. After controlling for firm and industry effects and 
	 business cycle fluctuations, R&D tax incentives are found to increase 
	 R&D wages. The R&D wage effect of these incentives is smaller than their 
	 effect on real R&D investment, but it is still sizeable. The elasticity 
	 of the R&D wage with respect to the fraction of the wage supported by 
	 the WBSO scheme is estimated at 0.1.
Classification-JEL: O32, O38, H25, J30, C23 
Keywords: price effect of tax incentives, tax credits, panel data model,
	 R&D workers, wages 
Series: UNU-MERIT Working Papers
Creation-Date: 2008
Number: 034
File-URL: http://www.merit.unu.edu/publications/wppdf/2008/wp2008-034.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2008034