Progressive taxation and wage setting when unions strategically interact
AbstractIn a multisector economy with unionized labor markets, the interdependence of union wage claims--typical of industrial bargaining--affects the relationship between tax progressivity and wage pressure, which varies in a nonlinear fashion with the nature of the wage bargain, and can be hump-shaped. Our empirical analysis of 20 OECD countries for the period 1997--2004 shows that higher tax progressivity increases pre-tax wages (and unemployment) in countries characterized by industry level wage bargaining, and reduces them in countries with local or fully centralized bargaining. Copyright 2007, Oxford University Press.
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Bibliographic InfoArticle provided by Oxford University Press in its journal Oxford Economic Papers.
Volume (Year): 59 (2007)
Issue (Month): 1 (January)
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Other versions of this item:
- Giorgio Brunello & Daniela Sonedda, 2006. "Progressive Taxation and Wage Setting when Unions Strategically Interact," "Marco Fanno" Working Papers 0017, Dipartimento di Scienze Economiche "Marco Fanno".
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
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- Etienne Lehmann & Claudio Lucifora & Simone Moriconi & Bruno Van Der Linden, 2013.
"Beyond the Labour Income Tax Wedge: The Unemployment-Reducing Effect of Tax Progressivity,"
- Etienne LEHMANN & Claudio LUCIFORA & Simone MORICONI & Bruno VAN DER LINDEN, 2013. "Beyond the Labour Income Tax Wedge: The Unemployment-Reducing Effect of Tax Progressivity," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2013018, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Etienne Lehmann & Claudio Lucifora & Simone Moriconi & Bruno Van der Linden, 2013. "Beyond the Labour Income Tax Wedge: The Unemployment-Reducing Effect of Tax Progressivity," CESifo Working Paper Series 4348, CESifo Group Munich.
- Kees Folmer, 2009. "Why do macro wage elasticities diverge? A meta analysis," CPB Discussion Paper 122, CPB Netherlands Bureau for Economic Policy Analysis.
- Brunello, Giorgio & Lupi, Claudio & Ordine, Patrizia, 2003. "Average Labor Taxes and Unemployment: Evidence from Italian Regions," Economics & Statistics Discussion Papers esdp03011, University of Molise, Dept. SEGeS.
- Daniela Sonedda, 2006. "A structural VAR approach on labour taxation policies," Applied Economics, Taylor & Francis Journals, vol. 38(1), pages 95-114.
- Kees Folmer, 2009. "Why do macro wage elasticities diverge?," CPB Memorandum 224, CPB Netherlands Bureau for Economic Policy Analysis.
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