EFFECTS OF TAX REFORMS IN A SHIRKING MODEL WITH UNION BARGAINING

Jose Garcia and José Vicente Ríos
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José Vicente Ríos: Dpto. Análisis Económico, Universitat de València

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: In this paper we introduce a progressive income tax in the shirking model with union bargaining presented by in Altenburg and Straub (2002). Indeed, we differentiate taxation on employees and employers for the fiscal policy analysis. The main results show that it is possible, with a constant revenue reform, to enhance employment by shifting the tax imposition towards lower firm taxation. And, that it is crucial to consider a proportional or progressive taxation on labour income in order to be able to analyse the effect on unemployment for a constant replacement rate.

Keywords: Labour taxation; union bargaining; efficiency wages (search for similar items in EconPapers)
JEL-codes: E24 J32 J41 J51 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2004-11
New Economics Papers: this item is included in nep-mac, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2004-42

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