IESET.
Hypotheses·labour·oecd_tax_wedge_low_wage_employment_penalty

In OECD country-year panels since 2001, higher employer-plus-employee labour tax wedges on low-wage workers predict lower employment rates for adults with below-upper-secondary education and higher inactivity among prime-age workers.

The directional claim is that a 10 percentage-point increase in the low-wage tax wedge is associated with at least a 1 percentage-point lower low-education employment rate within five years, after controlling for output growth, education mix, employment protection, union density, and institutional quality.

INCONCLUSIVEengine/runs/oecd_tax_wedge_low_wage_employment_penalty

INCONCLUSIVE_DATA_PENDING — no outcome variable loaded; missing: ['ilostat:EMP_2EMP_SEX_EDU_RT_A', 'ilostat:EIP_2EIP_SEX_AGE_RT_A']

confidence cueResult card produced; verdict unclassified.

policy briefCoverage too thin

In ordinary language

In plain terms, this asks whether low wage tax wedge is actually linked to better or worse low education employment rate from 2001 to 2023.

plain answer

This test cannot make a firm call yet. no outcome variable loaded; missing: ['ilostat:EMP_2EMP_SEX_EDU_RT_A', 'ilostat:EIP_2EIP_SEX_AGE_RT_A']

why it matters

Labor-market rules often help some workers while risking job loss or slower hiring for others. This test looks for that tradeoff in observable employment or unemployment data.

how the test works

It compares 38 country or place units from 2001 to 2023, using a panel fe design, with fixed effects for country and year.

what was measured
What changed
  • Low wage tax wedge
What we checked
  • Low education employment rate
  • Prime age inactivity rate
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/oecd_tax_wedge_low_wage_employment_penalty
1007550250200120122023AUSAUTBELCANCHECHLCOL
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show low_education_employment_rate across 38 sampled countries over 2001–2023.
The shapes above are stylised — none of the lines are real data.
Placeholder for oecd_tax_wedge_low_wage_employment_penalty. Published chart will be generated from engine/runs/oecd_tax_wedge_low_wage_employment_penalty/chart_data.json.

Pre-registration

pre-registered
first-spec commit e29141a · 2026-05-22T17:36:53Z
run generated · 2026-06-29T17:53:51Z

In OECD country-year panels since 2001, higher employer-plus-employee labour tax wedges on low-wage workers predict lower employment rates for adults with below-upper-secondary education and higher inactivity among prime-age workers. The directional claim is that a 10 percentage-point increase in the low-wage tax wedge is associated with at least a 1 percentage-point lower low-education employment rate within five years, after controlling for output growth, education mix, employment protection, union density, and institutional quality.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Refuted if the low-wage tax-wedge coefficient is non-negative for low-education employment, or if the implied effect of a 10 percentage-point higher wedge is smaller than minus-1 percentage point and statistically indistinguishable from zero at p <= 0.10 in both annual and five-year-average panels.

formal test & threshold
test:      panel_fe_low_wage_tax_wedge_low_education_employment
threshold: beta_tax_wedge_10pp <= -1.0pp and p <= 0.10 in the primary employment outcome

Method

Template
panel_fe
Fixed effects
country, year
Clustering
country
Sample
38 countries · 2001 – 2023
Evidence type
associational

Estimate two-way fixed effects with lagged tax-wedge exposure and five-year non-overlapping averages as robustness. The preferred coefficient is on the low-wage tax wedge. Robustness checks add country-specific linear trends, exclude Nordic countries, and compare the 67-percent-average-wage wedge to the average-wage wedge.

Data

VariableSourceTransform
low_education_employment_rate
outcome
ilostat:EMP_2EMP_SEX_EDU_RT_Atier 2
level_pct
prime_age_inactivity_rate
outcome
ilostat:EIP_2EIP_SEX_AGE_RT_Atier 2
level_pct
low_wage_tax_wedge
treatment
oecd:taxing_wages_67_percent_average_wagetier 2
level_pct
real_gdp_growth
control
world_bank_wdi:NY.GDP.MKTP.KD.ZGtier 2
level_pct
log_real_gdp_per_capita
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log
epl_strictness
control
oecd:EPL_OVtier 2
level
union_density
control
oecd:DSD_TUtier 2
level_pct
rule_of_law
control
wgi:RL.ESTtier 4
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — oecd_tax_wedge_low_wage_employment_penalty

Verdict: INCONCLUSIVE_DATA_PENDING — no outcome variable loaded; missing: ['ilostat:EMP_2EMP_SEX_EDU_RT_A', 'ilostat:EIP_2EIP_SEX_AGE_RT_A']

Pre-registration

  • Claim: In OECD country-year panels since 2001, higher employer-plus-employee labour tax wedges on low-wage workers predict lower employment rates for adults with below-upper-secondary education and higher inactivity among prime-age workers. The directional claim is that a 10 percentage-point increase in the low-wage tax wedge is associated with at least a 1 percentage-point lower low-education employment rate within five years, after controlling for output growth, education mix, employment protection, union density, and institutional quality.
  • Falsification rule: Refuted if the low-wage tax-wedge coefficient is non-negative for low-education employment, or if the implied effect of a 10 percentage-point higher wedge is smaller than minus-1 percentage point and statistically indistinguishable from zero at p <= 0.10 in both annual and five-year-average panels.
  • Falsification test: panel_fe_low_wage_tax_wedge_low_education_employment

Estimate

  • Error: no outcome variable loaded; missing: ['ilostat:EMP_2EMP_SEX_EDU_RT_A', 'ilostat:EIP_2EIP_SEX_AGE_RT_A']

Variables resolved

  • oecd:taxing_wages_67_percent_average_wage → low_wage_tax_wedge (treatment, publisher=constructed, n=874)
  • world_bank_wdi:NY.GDP.MKTP.KD.ZG → real_gdp_growth (controls, publisher=world_bank_wdi, n=13897)
  • world_bank_wdi:NY.GDP.PCAP.KD → log_real_gdp_per_capita (controls, publisher=world_bank_wdi, n=12104)
  • oecd:EPL_OV → epl_strictness (controls, publisher=oecd, n=1123)
  • oecd:DSD_TU@DF_TU → union_density (controls, publisher=oecd, n=1825)
  • wgi:RL.EST → rule_of_law (controls, publisher=wgi, n=5296)

Variables missing data

  • ilostat:EMP_2EMP_SEX_EDU_RT_A (outcome, name=low_education_employment_rate) — vintage not on disk
  • ilostat:EIP_2EIP_SEX_AGE_RT_A (outcome, name=prime_age_inactivity_rate) — vintage not on disk

Generated by scripts/run_panel_fe.py at 2026-06-29T17:53:51+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Candidate Worker C spec. This is framed as an empirical challenge to claims that redistribution financed through labour taxation is employment-neutral, but the design is evidence-neutral and should not be mapped with covers_claims until a separate linkage pass.

Authored framework. Read the transparency note.