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The Effects of Taxes on Aggregate Labor: A Cross-Country General-Equilibrium Study

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  • Hansson, Ingemar
  • Stuart, Charles

Abstract

At empirically reasonable labor supply elasticities, equilibrium models of public finance predict that greater taxes in a country should lead to lower aggregate labor. The authors examine data from a cross-section of twenty-two OECD economies for such a relationship. The approach is to estimate parameters of a static general-equilibrium model of aggregate labor. Greater taxes do appear to reduce equilibrium labor in the authors' sample. Indeed, estimated aggregate wage elasticities are generally greater than consensus estimates from traditional studies of cross sections of individuals. Copyright 1993 by The editors of the Scandinavian Journal of Economics.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.

Volume (Year): 95 (1993)
Issue (Month): 3 ()
Pages: 311-26

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Handle: RePEc:bla:scandj:v:95:y:1993:i:3:p:311-26

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Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442

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Cited by:
  1. Inge Mayeres, 1999. "The Distributional Impacts of Policies for the Control of Transport Externalities.An Applied General Equilibrium Model," Working Papers 1999.8, Fondazione Eni Enrico Mattei.
  2. Salhofer, Klaus & Schneider, Friedrich & Streicher, Gerhard, 1999. "Least Cost Efficiency Of Agricultural Programs: An Empirical Investigation," 1999 Annual meeting, August 8-11, Nashville, TN 21565, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  3. Friedrich Schneider & Klaus Salhofer & Erwin Schmid & Gerhard Streicher, 2001. "Was the Austrian agricultural policy least cost efficient?," Economics working papers 2001-03, Department of Economics, Johannes Kepler University Linz, Austria.

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