Advanced Search
MyIDEAS: Login to save this paper or follow this series

Does the Composition of Wage and Payroll Taxes Matter Under Nash Bargaining?

Contents:

Author Info

  • Erkki Koskela
  • Ronnie Schöb

Abstract

Using the Nash bargaining approach to wage negotiations this paper shows that conventional wisdom, according to which the total tax wedge is the sum of wage and payroll taxes, is valid for equal tax bases, e.g., when the tax exemption takes the form of a tax credit. However, the equivalence result ceases to hold when the tax bases are unequal due to tax allowances. In this case a revenue-neutral restructuring of labour taxes toward a narrower tax base decreases the gross wage and is thus good for employment.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.vatt.fi/file/vatt_publication_pdf/k203.pdf
Download Restriction: no

File URL: http://www.vatt.fi/publications/latestPublications/publication/Publication_1345_id/70
Download Restriction: no

Bibliographic Info

Paper provided by Government Institute for Economic Research Finland (VATT) in its series Discussion Papers with number 203.

as in new window
Length:
Date of creation: 01 Jan 1999
Date of revision:
Handle: RePEc:fer:dpaper:203

Contact details of provider:
Postal: Arkadiankatu 7, P.O. Box 1279, FI-00101 Helsinki
Phone: +358 295 519 400
Fax: +358 295 519 599
Email:
Web page: http://www.vatt.fi/
More information through EDIRC

Order Information:
Email:

Related research

Keywords: Tax wedge; payroll tax; wage tax; wage bargaining; non-equivalence;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, Octomber.
  2. Lockwood, Ben & Manning, Alan, 1993. "Wage setting and the tax system theory and evidence for the United Kingdom," Journal of Public Economics, Elsevier, vol. 52(1), pages 1-29, August.
  3. Koskela, Erkki & Vilmunen, Jouko, 1996. "Tax progression is good for employment in popular models of trade union behaviour," Labour Economics, Elsevier, vol. 3(1), pages 65-80, August.
  4. Holm, Pasi & Honkapohja, Seppo & Koskela, Erkki, 1994. "A monopoly-union model of wage determination with capital and taxes: An empirical application to the Finnish manufacturing," European Economic Review, Elsevier, vol. 38(2), pages 285-303, February.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:fer:dpaper:203. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anita Niskanen).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.