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Taxes, Strikes and Wages

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  • Goerke, Laszlo

Abstract

A union and a firm bargain about wage increases. The firm possesses private information about its revenues. A two-period screening model is used to derive equilibrium wage demands by the union and to calculate measures of strike activity. Changes in wage demands and dispute probabilities due to alterations in various taxes are analysed. A more progressive income tax, a lower level of income taxes and higher payroll taxes reduce wages and strike activity. Hence, tax policy can be used not only to affect wages and employment, but also to influence strike incidence. Copyright 1998 by Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research

Suggested Citation

  • Goerke, Laszlo, 1998. "Taxes, Strikes and Wages," Bulletin of Economic Research, Wiley Blackwell, vol. 50(2), pages 117-132, April.
    • Handle: RePEc:bla:buecrs:v:50:y:1998:i:2:p:117-32
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    Cited by:

    1. William H. Greene & Ana P. Martins, 2013. "Striking Features of the Labor Market: Empirical Evidence," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 56(2), pages 25-53.
    2. Chae, Suchan, 2002. "Tax incidence with bargaining," Economics Letters, Elsevier, vol. 77(2), pages 199-204, October.
    3. William H. Greene & Ana P. Martins, 2002. "Striking Features of the Labor Market," EERI Research Paper Series EERI RP 2002/08, Economics and Econometrics Research Institute (EERI), Brussels.
    4. William H. Greene & Ana P. Martins, 2013. "Striking Features of the Labor Market: Theory," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 56(2), pages 1-24.
    5. Goerke, Laszlo & Schnabel, Claus, 2002. "On strike insurance," Discussion Papers 12, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    6. Goerke, Laszlo, 1997. "A note on the impact of procedures in strike models: The case of bargaining structure," Discussion Papers, Series II 357, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".

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