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Employment in the US and Europe: The Roles of Taxes and Benefits

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Author Info

  • Toshihiko Mukoyama

    (University of Virginia)

  • Richard Rogerson

    (Arizona State University)

  • Aysegul Sahin

    (Federal Reserve Bank of New York)

  • Per Krusell

    (Princeton University)

Abstract

We build a model that incorporates both labor supply and frictions and use it to assess the effects of various tax and transfer programs on aggregate employment and unemployment. In particular, we assess the debate between Prescott and Ljungqvist and Sargent about the relative importance of taxes versus benefits in understanding the large differences in hours of work between Europe and the US.

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Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2009 Meeting Papers with number 71.

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Date of creation: 2009
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Handle: RePEc:red:sed009:71

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Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
Fax: 1-314-444-8731
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Web page: http://www.EconomicDynamics.org/society.htm
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