Progressive Taxation and Wage Setting: Some Evidence for Denmark
AbstractThe proposition that a progressive tax system contributes to wage moderation is studied using Danish earnings data disaggregated by occupation, gender and earnings level. Our main conclusions are that income-tax progression affects wage setting, but whether it moderates or exaggerates wage pressure is income dependent. An increase in progressivity reduces the pre-tax earnings of middle-income workers (manual male workers and moderate income earners among both male and female non-manual workers). The reverse is found for high-income earners (non-manual male workers), in that an increase in progressivity tends to raise pre-tax earnings. Finally, there is no significant effect of tax progressivity on the wages of low-income earners. Copyright 2000 by The editors of the Scandinavian Journal of Economics.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.
Volume (Year): 102 (2000)
Issue (Month): 4 (December)
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Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442
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- Ben Lockwood & Torsten Sloek & Torben Tranaes, . "Progressive Taxation and Wage Setting: Some Evidence for Denmark," EPRU Working Paper Series 95-20, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
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