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Taxation and Labor Markets

  • Pierre Picard

    (University of Manchester)

  • Eric Toulemonde

    (University of Namur)

We exploit the common features of models such as union-firm wage bargaining, search and efficiency wage models to develop a framework that can be used for analyzing the effects of any budget-neutral tax reform on employment in these models. We show that taxes paid by workers are not equivalent to taxes paid by firms when taxes are non linear. Moreover, increasing progressivity is good for employment in these models.

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Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 0707.

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Date of creation: 01 Aug 2000
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Handle: RePEc:ecm:wc2000:0707
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