The present paper has two aims. The first one concerns primarily an issue of method. I set up and analyse an explicitly stochastic model of the optimal behaviour of a firm, which recruits from a search labour market. The second aim of my paper concerns very much an issue of substance in...

Does tax policy affect the rate of self-employment in a modern welfare state? This question is analyzed empirically based on Swedish data for the entire post-war period. Available tax data indicate that payroll taxes have had a negative influence on the unincorporated rate of self-employment,...

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This paper includes theoretical and empirical analyses of some effects of changes in payroll taxes. First, the implication of the standard partial equilibrium analysis is explored in Section II. In particular, the relationship between statutory and economic incidence are clarified and the...

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