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Taxation and Unemployment: An Applied General Equilibrium Approach

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  • Christoph Boehringer
  • Stefan Boeters
  • Michael Feil

Abstract

We present an applied general equilibrium modelling approach to analyse employment and unemployment effects of labour tax cuts in an economy where wages are determined through firm-union bargaining at the sectoral level. In such a labour market regime, simulations for Germany show that labour tax policies can make only a small contribution to alleviating the problem of persistent unemployment.

Suggested Citation

  • Christoph Boehringer & Stefan Boeters & Michael Feil, 2004. "Taxation and Unemployment: An Applied General Equilibrium Approach," CESifo Working Paper Series 1272, CESifo.
    • Handle: RePEc:ces:ceswps:_1272
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