Low-Wage Employment Subsidies in a Labor-Turnover Model of the 'Natural Rate'
This paper models two kinds of wage subsidy in a model of the natural rate having a continuum of workers ranked by their productivity - a flat wage subsidy and a graduated wage subsidy, each financed by a proportional payroll tax. In the small open economy case, with the graduation as specified, we show that both schemes expand employment throughout the distribution; for those whose productivity is sufficiently far below the mean, take-home pay is unambiguously up, though the tax financing lowers take-home pay at the mean and above.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||1998|
|Contact details of provider:|| Postal: Indiana University, Center for Econometric Model Research, Department of Economics; Bloomington, IN 47405.|
Web page: http://www.indiana.edu/~econweb/
More information through EDIRC