This paper considers the effect of labour taxation on wages and employment in a trade union model with endogenous working hours. In the model, individuals choose working hours with a given wage rate, competitive firms decide on employment taking wages and working hours as given and a monopoly...

The report describes the development of labour taxation in Finland since the launching of the Employment Guidelines (EG) in 1997. The taxes considered include state and municipal taxes on earned income as well as social security payments of employees and employers. We find that the Finnish tax...

In this paper we consider the effects of labour taxation on wages, unemployment and efficiency in a job matching framework. We derive labour market equilibrium with taxes in a model of endogenous job creation and job destruction under three alternative hypothesis of wage formation: Nash bargain,...

The study consists of four essays, which analyse the implications of labour taxation and unemployment insurance (UI) in the models of imperfectly competitive labour markets. The first essay studies the effects of labour taxation on unemployment and efficiency in a search equilibrium model with...