Optimal Taxation and Employment Policy with a Centralized Wage Settin g
AbstractPublic policy is examined where the economy-wide labor and employer organizations bargain about wages. The main findings are as follo ws: employment subsidies must fall with the elasticity for the demand for labor but payroll subsidies on inputs which are not fully employ ed must rise with it; these subsidies must be uniform in all sectors and when optimally set, they will equalize all union wages as well as all producer wages for unemployed labor; and the government should p ay such unemployment benefits that the marginal utilities of income f or the employed and the unemployed become equal. Copyright 1987 by Royal Economic Society.
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Bibliographic InfoArticle provided by Oxford University Press in its journal Oxford Economic Papers.
Volume (Year): 39 (1987)
Issue (Month): 4 (December)
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- Clemens Fuest & Bernd Huber, 1999.
"Tax Coordination and Unemployment,"
International Tax and Public Finance,
Springer, vol. 6(1), pages 7-26, February.
- Clemens Fuest & Bernd Huber, 1997. "Wage bargaining, labor-tax progression, and welfare," Journal of Economics, Springer, vol. 66(2), pages 127-150, June.
- Aronsson, Thomas & Wikström, Magnus, 2011. "Optimal Tax Progression: Does it Matter if Wage Bargaining is Centralized or Decentralized?," UmeÃ¥ Economic Studies 829, Umeå University, Department of Economics.
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