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The Effects of Taxes on Labor in a Dynamic Efficiency Wage Model

The Effects of Taxes on Labor in a Dynamic Efficiency Wage Model PDF Author: Joao Ricardo Faria
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Languages : en
Pages : 0

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Book Description
This paper studies the impact of wage and employment taxes in an intertemporal efficiency wage model. The cases with fixed, linear and quadratic adjustment costs associated with job creation are considered. In general, the model shows that an increase in the employment tax leads to an increase in unemployment, reducing job creation, and has ambiguous effect on wages. While an increase in the wage tax reduces wages and has ambiguous impact on unemployment and job creation.