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Taxation and the Structure of Labor Markets: The Case of Corporatism

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Author Info
Summers, Lawrence H
Gruber, Jonathan
Vergara, Rodrigo

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Abstract

The authors propose an explanation for the wide variation in rates of taxation across developed economies, based on differences in labor market institutions. In 'corporatist' economies, which feature centralized labor markets, taxes on labor input will be less distortionary than when labor supply is determined individually. Since the level of labor supply is set by a small group of decisionmakers, these individuals will recognize the linkage between the taxes that workers pay and the benefits that they receive. Labor tax burdens are indeed higher in more corporatist nations, while nonlabor taxes are actually lower. There is also some evidence that the distortionary effects of labor taxes are lower in more corporatist economies. Copyright 1993, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Article provided by MIT Press in its journal Quarterly Journal of Economics.

Volume (Year): 108 (1993)
Issue (Month): 2 (May)
Pages: 385-411
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Handle: RePEc:tpr:qjecon:v:108:y:1993:i:2:p:385-411

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  1. MaCurdy, Thomas E & Pencavel, John H, 1986. "Testing between Competing Models of Wage and Employment Determination in Unionized Markets," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages S3-S39, June. [Downloadable!] (restricted)
  2. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," NBER Working Papers 3120, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Gordon, Robert J, 1986. "Productivity, Wages and Prices Inside and Outside of Manufacturing in the US, Japan and Europe," CEPR Discussion Papers 134, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  4. Card, David, 1990. "Unexpected Inflation, Real Wages, and Employment Determination in Union Contracts," American Economic Review, American Economic Association, vol. 80(4), pages 669-88, September. [Downloadable!] (restricted)
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  5. Bean, C R & Layard, P R G & Nickell, S J, 1986. "The Rise in Unemployment: A Multi-country Study," Economica, London School of Economics and Political Science, vol. 53(210(S)), pages S1-22, Supplemen. [Downloadable!] (restricted)
  6. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December. [Downloadable!] (restricted)
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  1. Casey B. Mulligan, 2000. "Can Monopoly Unionism Explain Publicly Induced Retirement?," NBER Working Papers 7680, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. S. Bandyopadhyay & S. C. Bandyopadhyay, 1998. "Monopoly Unions And Corporatism: Implications For Strategic Trade Policy," International Economic Journal, Korean International Economic Association, vol. 12(4), pages 1-22, December. [Downloadable!] (restricted)
  3. Bovenberg, A.L., 2003. "Tax policy and labor market performance," Discussion Paper 90, Tilburg University, Center for Economic Research. [Downloadable!]
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  4. Cuciniello Vincenzo, 2008. "The effects of macroeconomic institutions on economic performance in a general equilibrium model," wp.comunite 0036, Department of Communication, University of Teramo. [Downloadable!]
  5. Jonathan Gruber & Maria Hanratty, 1993. "The Labor Market Effects of Introducing National Health Insurance: Evidence from Canada," NBER Working Papers 4589, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Jonathan Gruber, 1995. "The Incidence of Payroll Taxation: Evidence from Chile," NBER Working Papers 5053, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Pekka Sinko, 2004. "Progressive Taxation Under Centralised Wage Setting," VATT Discussion Papers 349, Government Institute for Economic Research (VATT). [Downloadable!]
  8. Gary S. Becker & Casey B. Mulligan, 1998. "Deadweight Costs and the Size of Government," NBER Working Papers 6789, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  9. canegrati, emanuele, 2006. "The Single Mindedness Theory of Labor Unions," MPRA Paper 1224, University Library of Munich, Germany. [Downloadable!]
  10. Koskela, Erkki & Schoeb, Ronnie, 2000. "Optimal Factor Income Taxation in the Presence of Unemployment," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
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  11. Agell, Jonas & Persson, Mats, 1998. "Tax Arbitrage and Labor Supply," Seminar Papers 647, Stockholm University, Institute for International Economic Studies. [Downloadable!]
  12. Jaakko Kiander & Juha Kilponen & Jouko Vilmunen, 2000. "Taxes, Growth and Unemployment in the OECD Countries - Does Collective Bargaininig Matter?," VATT Discussion Papers 235, Government Institute for Economic Research (VATT). [Downloadable!]
  13. Roberto Perotti, 2001. "Is a Uniform Social Policy Better? Fiscal Federalism and Factor Mobility," American Economic Review, American Economic Association, vol. 91(3), pages 596-610, June. [Downloadable!] (restricted)
  14. Stephen G. Cecchetti & Anil K Kashyap, 1996. "International Cycles," NBER Working Papers 5310, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Pekka Sinko & Juha Kilponen, 2003. "Does Centralised Wage Setting Lead into Higher Taxation?," VATT Discussion Papers 314, Government Institute for Economic Research (VATT). [Downloadable!]
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  16. Agell, Jonas, 2003. "Efficiency and Equality in the Labour Market," Research Papers in Economics 2003:11, Stockholm University, Department of Economics. [Downloadable!]
  17. Nicola Acocella & Giovanni Di Bartolomeo & Patrizio Tirelli, 2004. "The macroeconomics of social pacts," Labor and Demography 0410003, EconWPA. [Downloadable!]
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  18. Blau, Francine & Kahn, Lawrence, 2004. "Do Cognitive Test Scores Explain Higher U.S. Wage Inequality?," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
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  19. Arístides Torche & Gert Wagner, 1997. "Previsión Social: Valoración Individual de un Beneficio Mandatado," Cuadernos de Economía (Latin American Journal of Economics), Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 34(103), pages 363-390. [Downloadable!]
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