Labour taxation and employment in trade union models: A partial survey
AbstractThis paper uses a union bargaining framework, where the wage rate is negotiated between the representatives of employees and employers and firms unilaterally determine employment, to discuss the relationship between labour taxation and employment. In imperfectly competitive labour markets higher labour taxes – income and payroll taxes – will increase labour costs and have negative effects on employment. Tax progression tends to moderate wages and boost employment. Moreover, if labour tax bases are unequal due to tax exemptions, the structure of labour taxation matters so that the tax wedge may not be a sufficient statistic to describe the channel of influence of labour taxation. Finally, distortionary effects of labour taxes in more corporatist economies should be smaller than in economies with more decentralised wage bargaining. Empirical evidence – though not always very strong – supports these notions.
Download InfoIf 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.
Bibliographic InfoPaper provided by Bank of Finland in its series Research Discussion Papers with number 19/2001.
Length: 32 pages
Date of creation: 21 Sep 2001
Date of revision:
union bargaining; labour taxation; tax progression;
Find related papers by JEL classification:
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Fernando Sanchez Losada & Daniel Cardona, 2005.
"The Unemployment Benefit System: a Redistributive or an Insurance Institution?,"
Working Papers in Economics
129, Universitat de Barcelona. Espai de Recerca en Economia.
- Daniel Cardona & Fernando Sánchez-Losada, 2004. "The Unemployment Benefit System: a Redistributive or an Insurance Institution?," DEA Working Papers 8, Universitat de les Illes Balears, Departament d'Economía Aplicada.
- Houben, Henriette & Baumgarten, Jörg, 2011. "Krankt das deutsche Steuersystem am Mittelstandsbauch und der kalten Progession?," arqus Discussion Papers in Quantitative Tax Research 119, arqus - Arbeitskreis Quantitative Steuerlehre.
- Alfonso Arpaia & Giuseppe Carone, 2004. "Do labour taxes (and their composition) affect wages in the short and in the long run?," Public Economics 0411004, EconWPA.
- Christoph Boehringer & Stefan Boeters & Michael Feil, 2004.
"Taxation and Unemployment: An Applied General Equilibrium Approach,"
CESifo Working Paper Series
1272, CESifo Group Munich.
- Bohringer, Christoph & Boeters, Stefan & Feil, Michael, 2005. "Taxation and unemployment: an applied general equilibrium approach," Economic Modelling, Elsevier, vol. 22(1), pages 81-108, January.
- Alho, Kari O. E., 2006. "Labour Market Institutions and the Effectiveness of Tax and Benefit Policies in Enchancing Employment: A General Equilibrium Analysis," Discussion Papers 1008, The Research Institute of the Finnish Economy.
- Alho, Kari, 2002. "The Equilibrium Rate of Unemployment and Policies to Lower It: The Case of Finland," Discussion Papers 839, The Research Institute of the Finnish Economy.
- Jan-Egbert Sturm & Bjørn Volkerink, 2003. "How to Measure the Tax Burden on Labour at the Macro-Level?," CESifo Working Paper Series 963, CESifo Group Munich.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Minna Nyman).
If references are entirely missing, you can add them using this form.