The effects of skills, corporate taxes and the employment rate of those aged 60 to 64 on the employment rate of people aged 15 to 59

One might think that the overall employment rate and the employment rate of those aged 15 to 59 depend on: Labour force skills; Corporate taxes, in particular production taxes and social contributions; The employment rate of those aged 60 to 64, which is linked in particular to the rules of the pension system. Comparing OECD countries, we estimate the sensitivity of the employment rate of those aged 15 to 59 to these three variables. We find that the following factors are significant in explaining the employment rate of people aged 15 to 59: The skill level of the labour force; The weight of corporate social contributions and production taxes. For example, if France: Had Germany’s skill level, its employment rate of those aged 15 to 59 would be 4.5 percentage points higher; Had the same level of corporate social contributions and corporate production taxes as Germany, its employment rate of those aged 15 to 59 would be 3.7 percentage points higher.