Effect of unemployment insurance tax on wages and employment: a partial equilibrium analysis

Deergha Raj Adhikari, Lynn Gray and Jackie Burns

Applied Economics Letters, 2009, vol. 16, issue 3, 247-250

Abstract: We develop a partial equilibrium model under a cost minimization problem to derive the effect of an unemployment insurance tax. The model suggests that a portion of the tax is passed on to employees by means of reduced wages and employment.

Date: 2009
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DOI: 10.1080/13504850601018254

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