Kolm, Ann-Sofie (Department of Economics, Copenhagen Business School) Nielsen, Søren Bo (Department of Economics, Copenhagen Business School)
Abstract
To examine the effects on labor market performance of government tax and enforcement policies, this paper develops an equilibrium model featuring tax evasion, matching frictions, and worker-firm wage bargains. In the wage bargains, workers and firms can agree on the amount of remuneration that should not be reported to the tax authorities. We find that increased taxation actually reduces unemployment, whereas more zealous enforcement has the opposite effect.
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Publisher Info
Paper provided by Copenhagen Business School, Department of Economics in its series Working Papers with number
10-2007.
Length: 31 pages Date of creation: 01 Jan 2007 Date of revision: Handle: RePEc:hhs:cbsnow:2007_010
Contact details of provider: Postal: Department of Economics, Copenhagen Business School, Solbjerg Plads 3 C, 5. sal, DK-2000 Frederiksberg, Denmark Phone: 38 15 25 75 Fax: 38 15 26 65 Email: Web page: http://www.cbs.dk/departments/econ/ More information through EDIRC
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Find related papers by JEL classification: E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth F16 - International Economics - - Trade - - - Trade and Labor Market Interactions