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On The Impact of Labor Tax Reforms on Unemployment in Tunisia

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  • Sami Bibi

Abstract

The purpose of this paper is to study the effects of tax reforms on unemployment and wages. Since the characterization of labor market is always a problematic issue, the impact of various revenue-neutral tax reforms on unemployment, wages, prices, and consumption in Tunisia are calibrated using three equilibrium models: competitive, union bargaining, and efficiency wages. These reforms affect alternatively labor taxation structure, value added tax, and unemployment benefits. Simulations show that reforms altering labor tax instruments could reduce significantly unemployment under union wage model but other tax tools are preferable under competitive and efficiency wages.

Suggested Citation

  • Sami Bibi, 2003. "On The Impact of Labor Tax Reforms on Unemployment in Tunisia," Working Papers 0330, Economic Research Forum, revised Oct 2003.
    • Handle: RePEc:erg:wpaper:0330
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    References listed on IDEAS

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