Impact of Profit Tax on Employment in the Private Non-agricultural Sector in Albania

Abstract

In this paper we will analyze the employment rate in Albania, how it has changed over the years starting after the 1990s. For research reasons we have detached to analyze the employment rate in the private non-agricultural sector. Based on an analysis made by the World Bank and many other official sources such as the Labor Force Survey, the International Labor Organization (ILO) and official data such as INSTAT, we have noticed that employment in the Albanian market has become a problematic issue over the years because the employment rate has decreased. What are the factors that affect the employment rate? Does the profit tax rate have an effect on employment or not? We used an econometric model, linear regression to see the interdependence between these two variables using official data from 1995-2018. We have studied this period of time until 2018 where the situation has been normal, not including the COVID 19 crisis, which is an unusual period that in our opinion should be treated separately.