Why is the public sector more labor-intensive? A distortionary tax argument
Panu Poutvaara () and
Munich Reprints in Economics from University of Munich, Department of Economics
Government-run entities are often more labor-intensive than private companies, even with identical production technologies. This need not imply slack in the public sector, but may reflect a wage tax advantage, stemming from the fact that government entities (partly) pay their taxes to themselves. A tax-induced cost advantage of public production precludes production efficiency and reduces welfare when labor supply is inelastic. With an elastic labor supply, a wage tax advantage of the public sector may improve welfare if it allows for a higher net wage.
References: Add references at CitEc
Citations: View citations in EconPapers (6) Track citations by RSS feed
Published in Journal of Economics / Zeitschrift für Nationalökonomie 2 94(2008): pp. 105-124
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Journal Article: Why is the public sector more labor-intensive? A distortionary tax argument (2008)
Working Paper: Why is the Public Sector More Labor-Intensive? A Distortionary Tax Argument (2004)
Working Paper: Why Is the Public Sector More Labor-Intensive? A Distortionary Tax Argument (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenar:19825
Access Statistics for this paper
More papers in Munich Reprints in Economics from University of Munich, Department of Economics Ludwigstr. 28, 80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Tamilla Benkelberg ().