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A note on-the-job amenities and supply of labor : the Cobb-Douglas case

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  • Heikki P. Niemeläinen

    (University of Helsinki)

Abstract

In an article published by Decker (1988) it is demonstrated that the effect of earnings taxation on the compensated labor supply is ambiguous. In this paper I demonstrate that with Ihe Cobb-Douglas utility function an unambiguous result is attainable. In this case, the compensated tax effect on desired work hours is negative even if the on-the-job amenities are endogenous.

Suggested Citation

  • Heikki P. Niemeläinen, 1990. "A note on-the-job amenities and supply of labor : the Cobb-Douglas case," Finnish Economic Papers, Finnish Economic Association, vol. 3(1), pages 61-63, Spring.
  • Handle: RePEc:fep:journl:v:3:y:1990:i:1:p:61-63
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    1. Decker, Paul T., 1988. "The effect of taxation on labor supply when on-the-job amenities are endogenous," Economics Letters, Elsevier, vol. 27(1), pages 89-94.
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