A note on-the-job amenities and supply of labor: the Cobb-Douglas case

Heikki P. Niemeläinen
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Heikki P. Niemeläinen: University of Helsinki

Finnish Economic Papers, 1990, vol. 3, issue 1, 61-63

Abstract: In an article published by Decker (1988) it is demonstrated that the effect of earnings taxation on the compensated labor supply is ambiguous. In this paper I demonstrate that with Ihe Cobb-Douglas utility function an unambiguous result is attainable. In this case, the compensated tax effect on desired work hours is negative even if the on-the-job amenities are endogenous.

Date: 1990
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