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The Unemployment and Wage Effects of Shifting to an Indirect Tax in an Efficiency Wage Model
Author(s) -
CHANG JUINJEN,
LIN CHUNGCHENG,
LAI CHINGCHONG
Publication year - 1999
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1999.tb02444.x
Subject(s) - economics , unemployment , labour economics , efficiency wage , wage bargaining , wage , consumption (sociology) , tax revenue , income tax , ex ante , indirect tax , tax reform , macroeconomics , public economics , social science , sociology
This paper examines the unemployment and wage effects of the tax shift from an income tax to a consumption tax in a shirking‐type efficiency wage model. It is found that the results of the ex‐ante individual income‐neutral and aggregate revenue‐neutral proposals in this paper's efficiency wage model confirm those in the monopoly trade union model analyzed by Sampson (1986), Creedy and McDonald (1990, 1992), and Pemberton (1992). The ex‐post tax‐shifting schemes are also discussed.