Smith, E (1994) Taxation in a two-sided search model. Journal of Public Economics, 54 (3). pp. 423-435. DOI https://doi.org/10.1016/0047-2727(94)90044-2
Smith, E (1994) Taxation in a two-sided search model. Journal of Public Economics, 54 (3). pp. 423-435. DOI https://doi.org/10.1016/0047-2727(94)90044-2
Smith, E (1994) Taxation in a two-sided search model. Journal of Public Economics, 54 (3). pp. 423-435. DOI https://doi.org/10.1016/0047-2727(94)90044-2
Abstract
This paper analyzes the effects of wage and profit taxation in a simple search and bargaining model. Wage tax effects depend upon the level of unemployment benefits. If unemployment benefits are less than search costs or if benefits are taxed as income, then a wage tax decreases unemployment. It also decreases the wage, thereby overshifting the tax burden. Profit tax effects depend upon job entry. In the short run with a fixed number of jobs (filled jobs plus vacancies), a profit tax decreases unemployment. It also raises the wage, again overshifting the tax. In the long run, the converse holds.
Item Type: | Article |
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Subjects: | H Social Sciences > HB Economic Theory |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Economics, Department of |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 29 Jun 2012 11:37 |
Last Modified: | 25 Oct 2024 13:18 |
URI: | http://repository.essex.ac.uk/id/eprint/2697 |