The difference between the net earnings that a worker takes home at the end of the year and what it costs to employ that worker tracked by the OECD) is called:

Question

Quizplus · Accepted Answer

The tax wedge is the difference between what the employer pays to employ a worker and what the worker takes home after taxes and social security contributions. This is tracked by the OECD and is used to compare the cost of employment across different countries. Therefore, option B is correct. Option A refers to the wages earned after taxes, which is not the same as the tax wedge. Option C refers to income sourced from the United States, which is unrelated to the question. Option D is incorrect as there is a correct answer, which is option B.

The Difference Between the Net Earnings That a Worker Takes