Wage and employment effects of a wage norm : The Polish transition experience
AbstractMost transition countries used tax-supported wage norms in the early 1990's, as a part of their market liberalization programs. This paper analyses how a firm-level tax (or subsidy) on deviations from a pre-set wage norm may promote employment by rotating the labor demand curve perceived by the workers' union around the value of the norm. We derive the conditions such that it yields a positive employment effect. We test the effect of the norm on the wages on a sample of Polish firms in 1990 and 1991. The data support the role of the wage norm on the position of the perceived labor demand and the role of the tax rate on its slope.
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Bibliographic InfoPaper provided by National Bank of Belgium in its series Working Paper Research with number 209.
Length: 32 pages
Date of creation: Jan 2011
Date of revision:
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transition economies; labor market; unions; excess wage tax; employment;
Find related papers by JEL classification:
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
- P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions
This paper has been announced in the following NEP Reports:
- NEP-ACC-2011-02-12 (Accounting & Auditing)
- NEP-ALL-2011-02-12 (All new papers)
- NEP-LAB-2011-02-12 (Labour Economics)
- NEP-TRA-2011-02-12 (Transition Economics)
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