Taxing Excess Wages to Promote Employment: The Case of Poland 1990-1991
Alain de Crombrugghe and
Grégory de Walque ()
Working Papers from Notre-Dame de la Paix, Sciences Economiques et Sociales
The paper analyzes theoretically and empirically how a firm level tax calculated on the average wage relative to a pre-set norm may promote employment. The theoretical model generalizes the discussion to the case of a subsidization of the average wage dept under the norm chosen by the government. We assume given labor demand and a monopoly union negotiating wages at the firm level in order to maximize the part of the wage bill exceeding the alternative wage.
Keywords: TAXATION; EMPLOYMENT (search for similar items in EconPapers)
JEL-codes: E24 H25 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:nodapa:194
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