UNU-MERIT Working Papers Series
Do R&D tax incentives lead to higher wages for R&D workers? Evidence from the Netherlands
Boris Lokshin & Pierre Mohnen #2012-058This paper examines the impact of the Dutch R&D tax incentive scheme on
the wages of R&D workers. We construct firm specific R&D tax credit
rates that vary over time following variations in the Dutch R&D tax
incentive program. Using instrumental variables we estimate a
wage-sharing model with an unbalanced firm-level panel data covering the
period 1997-2004. The elasticity of the R&D wage with respect to the
fraction of the wage supported by the fiscal incentives scheme is
estimated at 0.2 in the short run and 0.24 in the long run.
Keywords: R&D wages; tax incentives;
JEL Classification: O32, O38, H25, J30, C23
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