Labor tax reform and equilibrium unemployment: a search and matching approach

Ben Heijdra (b.j.heijdra@rug.nl) and Jenny Ligthart

No 200409, CCSO Working Papers from University of Groningen, CCSO Centre for Economic Research

Abstract: The paper studies simple strategies of labor tax reform in a search and matching model of the labor market featuring endogenous labor supply. Changing the composition of the tax wedge---that is, reducing a payroll tax and increasing a progressive wage tax such that the marginal tax wedge remains unaffected---increases employment, reduces the equilibrium unemployment rate, and increases public revenue as long as workers do not have all the bargaining power in wage negotiations. A strategy of replacing employment taxes by payroll taxes increases employment and reduces the equilibrium unemployment rate, while the effect on public revenue is ambiguous.

Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://irs.ub.rug.nl/ppn/268627444 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://irs.ub.rug.nl/ppn/268627444 [302 Found]--> https://irs.ub.rug.nl/ppn/268627444 [302 Found]--> https://www.rug.nl/research/portal/publications/pub(f9309b55-27b7-43f6-ae86-7b8f8778ce97).html [301 Moved Permanently]--> https://research.rug.nl/en/publications/pub(f9309b55-27b7-43f6-ae86-7b8f8778ce97).html)

Related works:
Working Paper: Labor Tax Reform and Equilibrium Unemployment: A Search and Matching Approach (2004)
Working Paper: Labor Tax Reform and Equilibrium Unemployment: A Search and Matching Approach (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gro:rugccs:200409

Access Statistics for this paper

More papers in CCSO Working Papers from University of Groningen, CCSO Centre for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Hanneke Tamling (h.g.tamling@rug.nl).