Public Profit Sharing

Ronnie Schöb
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Ronnie Schöb: The University of Western Ontario Department of Economics, https://economics.uwo.ca/
Authors registered in the RePEc Author Service: Ronnie Schoeb

No 20012, University of Western Ontario, Departmental Research Report Series from University of Western Ontario, Department of Economics

Abstract: Many countries suffer from persistently high unemployment rates. The scope for labour market reforms is often limited to measures that hurt neither shareholders nor workers. This paper develops a policy proposal, which allows the government to reduce wage costs without changing the income positions as determined in the process of wage negotiations. It is shown that the introduction of public profit sharing, i.e. substituting profit share for social security contributions, can boost employment both in the short run and the long run. Calibrating the model and comparing the results with recent empirical findings about the impact of labour taxation confirm the theoretical findings.

Keywords: public profit sharing; trade unions; unemployment; labour market reform (search for similar items in EconPapers)
Date: 2001-05
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Journal Article: Public Profit Sharing (2002)
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