We investigate the interaction between labour and credit market imperfections for the determination of equilibrium unemployment within the framework of the right-tomanage approach. Our analysis highlights the critical role of labour mobility for the evaluation of the employment implications of...

This paper addresses outsourcing in the two-type optimal income tax model. If the government is able to control outsourcing via a direct tax instrument, outsourcing will not affect the marginal income tax structure. In the absence of a direct tax instrument, and under the plausible assumption...

We investigate the interaction between labor and credit market imperfections for the determination of equilibrium unemployment within the framework of the "right-to-manage" approach. Our analysis highlights the critical role of labor mobility for the evaluation of the employment implications of...

We analyze the following questions associated with flexible outsourcing under partlyimperfect dual domestic labour markets, where high skilled workers participate in firm’s profitvia profit sharing: How does the implementation of profit sharing influence flexibleoutsourcing? What is the...

We combine profit sharing and outsourcing, if the wage for worker is decided by a labor unionto analyze how does the implementation of profit sharing affect individual effort and thebargained wage and thus outsourcing? We find that profit sharing and the wage level havean individual...

What are the impacts of labor tax reform on wage setting and employment to keep therelative tax burden per low-skilled and high-skilled workers constant in the case ofheterogenous domestic labor markets, i.e. imperfect competition in low-skilled labor andperfect competition in high-skilled labor...

We evaluate the effects of international outsourcing and labor taxation on wage formation and equilibrium unemployment in dual labor markets. Outsourcing promotes wage dispersion between the high-skilled and low-skilled workers. Higher domestic low-skilled wage tax, higher payroll tax and lower...