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Efficiency Wages and Taxes
Author(s) -
Goerke Laszlo
Publication year - 1999
Publication title -
australian economic papers
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 15
eISSN - 1467-8454
pISSN - 0004-900X
DOI - 10.1111/1467-8454.00047
Subject(s) - economics , labour economics
Various taxes influence wage and employment outcomes in efficiency wage models. These findings are extended by incorporating more comprehensive tax functions and additional tax parameters. Moreover, the importance of different effort functions is evaluated. It is shown that higher marginal tax rates, holding the level of taxes constant, reduce wages and increase employment. Higher levels of taxes on income, labour costs and value‐added tend to raise unemployment.