Progressive Taxation and Wage Setting when Unions Strategically Interact
AbstractIn a multisector economy with unionized labor markets, the interdependence of union wage claims - typical of industrial bargaining - affects the relationship between tax progressivity and wage pressure, which varies in a nonlinear fashion with the nature of the wage bargain, and can be hump-shaped. Our empirical analysis of 20 OECD countries for the period 1997-2004 shows that higher tax progressivity increases pre-tax wages (and unemployment) in countries characterized by industry level wage bargaining, and reduces them in countries with local or fully centralized bargaining.
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Bibliographic InfoPaper provided by Dipartimento di Scienze Economiche "Marco Fanno" in its series "Marco Fanno" Working Papers with number 0017.
Length: 21 pages
Date of creation: May 2006
Date of revision:
Other versions of this item:
- Giorgio Brunello & Daniela Sonedda, 2007. "Progressive taxation and wage setting when unions strategically interact," Oxford Economic Papers, Oxford University Press, vol. 59(1), pages 127-140, January.
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-06-10 (All new papers)
- NEP-LAB-2006-06-10 (Labour Economics)
- NEP-PBE-2006-06-10 (Public Economics)
- NEP-PUB-2006-06-10 (Public Finance)
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- Kees Folmer, 2009. "Why do macro wage elasticities diverge?," CPB Memorandum 224, CPB Netherlands Bureau for Economic Policy Analysis.
- Etienne Lehmann & Claudio Lucifora & Simone Moriconi & Bruno Van der Linden, 2013.
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CESifo Working Paper Series
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