Do R&D tax incentives lead to higher wages for R&D workers? Evidence from The Netherlands

B. Lokshin; P. Mohnen

doi:10.1016/j.respol.2012.12.004

Do R&D tax incentives lead to higher wages for R&D workers? Evidence from The Netherlands

B. Lokshin^*, P. Mohnen

^*Corresponding author for this work

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

This 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. (C) 2013 Elsevier B.V. All rights reserved.

Original language	English
Pages (from-to)	823-830
Journal	Research Policy
Volume	42
Issue number	3
DOIs	https://doi.org/10.1016/j.respol.2012.12.004
Publication status	Published - 1 Jan 2013

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10.1016/j.respol.2012.12.004

Cite this

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abstract = "This 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. (C) 2013 Elsevier B.V. All rights reserved.",

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AB - This 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. (C) 2013 Elsevier B.V. All rights reserved.

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