摘要：AbstractOur paperwork seeks to analyze the difference between the labor cost and the net wage (representing labor tax wedge) in correlation with the unemployment rate and employment rate, as the idea that a high labor cost produces distortions in the labor market is widely accepted. With this purpose in mind, we used the hierarchical cluster analysis on a sample of 41 countries (being about OECD and EU countries). Following this analysis, we concluded that the countries can be divided in two big categories based on the unemployment rate, employment rate and the difference between the labor cost and the net wage (labor tax wedge). For countries characterized by a large gap between labor costs and net wage and which also present a high level of unemployment there is a need to adopt fiscal measures for reducing labor cost.
