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Union strategy and optimal income taxation
[Gewerkschaftsstrategie und optimale Einkommensteuer]

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  • Kessing, Sebastian G.
  • Konrad, Kai A.

Abstract

Restrictions on work hours are more important in countries with a large welfare state. We show that this empirical observation is consistent with the strategic effects of such restrictions in a welfare state in the context of optimal direct taxation in the tradition of Mirrlees (1971). Our results also apply to nonwelfarist states which have income redistribution, but not in purely extortionary states.

Suggested Citation

  • Kessing, Sebastian G. & Konrad, Kai A., 2005. "Union strategy and optimal income taxation
    [Gewerkschaftsstrategie und optimale Einkommensteuer]    ," Discussion Papers, Research Unit: Market Processes and Governance SP II 2005-04, Social Science Research Center Berlin (WZB).
    • Handle: RePEc:zbw:wzbmpg:spii200504
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    References listed on IDEAS

    as
    1. Sinn, Hans-Werner, 1995. " A Theory of the Welfare State," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(4), pages 495-526, December.
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    7. Konrad, Kai A, 1994. "The Strategic Advantage of Being Poor: Private and Public Provision of Public Goods," Economica, London School of Economics and Political Science, vol. 61(241), pages 79-92, February.
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    More about this item

    Keywords

    Optimal income taxation; labor unions; work hours;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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