Union Strategy and Optimal Income Taxation

Sebastian Kessing and Kai Konrad

No 1545, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Restrictions on work hours are more important in countries with a large welfare state. We show that this empirical observation is consistent with the strategic effects of such restrictions in a welfare state in the context of optimal direct taxation in the tradition of Mirrlees (1971). Our results also apply to non-welfarist states which have income redistribution, but not in purely extortionary states.

Keywords: labor unions; work hours; optimal income taxation (search for similar items in EconPapers)
JEL-codes: H21 H23 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2005-03
New Economics Papers: this item is included in nep-bec, nep-pbe and nep-pub
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Published - published in: Journal of Public Economics, 2006, 90(1-2), 393-402

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