Public Provision of Private Goods and Equilibrium Unemployment
AbstractThis paper deals with public provision of a private good in a two-type model with optimal nonlinear income taxation. We assume that the wage rates are determined by bargaining between unions and firms, meaning that the equilibrium is characterized by unemployment. The results show that imperfect competition in the labor market gives rise to additional policy incentives associated with the self-selection constraint, which may justify either more or less public provision than under perfect competition. The paper also addresses employment-related motives behind public provision of private goods.
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Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.
Volume (Year): 61 (2005)
Issue (Month): 3 (November)
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Find related papers by JEL classification:
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
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- Aronsson, Thomas & Wehke, Sven, 2008.
"Public goods, unemployment and policy coordination,"
Regional Science and Urban Economics,
Elsevier, vol. 38(3), pages 285-298, May.
- Aronsson, Thomas & Wehke, Sven, 2006. "Public Goods, Unemployment and Policy Coordination," UmeÃ¥ Economic Studies 700, Umeå University, Department of Economics.
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