A Theoretical Derivation of the Laffer Curve and the Effect of the Tax on Wage and Employment

The Laffer curve showing tax revenue as a function of the tax on the prevailing money wage is derived from the aggregate supply of labor function. Consequently, the possible trade-off between tax revenue and employment (or total output) is considered. Then the tax is shown to result in wage rigidity downward even under competitive condition. Some policy implications and relevant theoretical issues are noted.

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Year of publication:	1997-06
Authors:	Miranda, Casimiro V. Miranda Jr.
Institutions:	School of Economics, University of the Philippines at Diliman

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Series:	UP School of Economics Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Published as UPSE Discussion Paper No. 1997-06, June 1997 Number 199706
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010856128