TAX INCIDENCE IN A MODEL WITH EFFICIENCY WAGES AND UNEMPLOYMENT

Vassilis Rapanos ()

Public Economics from University Library of Munich, Germany

Abstract: The purpose of the present paper is to examine the effects of taxation on income distribution in a model with efficiency wages and involuntary unemployment. Central to the efficiency-wage theory is the hypothesis that firms may set wages above market-clearing levels, whenever the productivity of labor depends positively on the real wage paid by the firm. Within a two sector general equilibrium model we study the incidence of factor and commodity taxes on income distribution. Our findings are quite different from the results derived by the traditional neoclassical analysis, originally developed by Harberger.

Keywords: tax incidence; efficiency wages (search for similar items in EconPapers)
JEL-codes: H22 J3 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2004-04-06
New Economics Papers: this item is included in nep-pbe and nep-pub
Note: Type of Document - pdf; pages: 18
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https://econwpa.ub.uni-muenchen.de/econ-wp/pe/papers/0404/0404001.pdf (application/pdf)

Related works:
Journal Article: Tax Incidence in a Model with Efficiency Wages and Unemployment (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwppe:0404001

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