Tax Incidence in a Model with Efficiency Wages and Unemployment
AbstractThe purpose of the present paper is to examine the effects of taxation on income distribution in a model with efficiency wages and involuntary unemployment. Central to our efficiency-wage model is the hypothesis that firms set wages above market-clearing levels, whenever the productivity of labor depends on the real wage paid by the firm, and unemployment. Within a two sector general equilibrium model we study the incidence of factor and commodity taxes on income distribution, and unemployment. Our findings differ substantially from those derived by the traditional neoclassical analysis, originally developed by Harberger, and as it has been extended by several authors.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal International Economic Journal.
Volume (Year): 20 (2006)
Issue (Month): 4 ()
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Other versions of this item:
- Vassilis T Rapanos, 2004. "Tax Incidence In A Model With Efficiency Wages And Unemployment," Public Economics 0404001, EconWPA.
- J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
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