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Government-run entities are often more labor-intensive than private companies, even with identical production … firms. A tax-favored treatment of public production precludes production efficiency. It reduces welfare when labor supply is … constant. With an elastic labor supply, a wage tax advantage of the public sector may improve welfare if it allows for a higher …
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In an efficiency wage economy, lump-sum severance pay from which shirkers can be excluded raises employment. However, severance payments are usually related to wages. It is shown that earnings-related, mandated severance pay will have ambiguous employment effects if effort can be varied...
Persistent link: https://www.econbiz.de/10003355561
Decisions by firms and individuals on the extent of their tax payments have generally been treated as separate choices. Empirically, a positive relationship between corporate and personal income tax evasion can be observed. The theoretical analysis in this paper shows that a manager's decision...
Persistent link: https://www.econbiz.de/10003355568
We study the effects of revenue-neutral labor tax reforms in an imperfectly competitive domestic labor market under … negotiated wage rate, increase domestic labor demand and decrease international outsourcing. In the presence of wage tax … exemption, a lower payroll tax and a higher wage tax will increase domestic labor demand and decrease international outsourcing …
Persistent link: https://www.econbiz.de/10003808576
Altruistic parents may transfer resources to their offspring by providing education, and by leaving bequests. We show that in the presence of wage taxation, a small bequest tax may improve efficiency in an overlapping-generations framework with only intended bequests, by enhancing incentives of...
Persistent link: https://www.econbiz.de/10003465882
This paper identifies several distortions which create barriers to entrepreneurship. First, in addition to the innate entry cost, there are entry costs caused by regulation. Second, union wage policies raise the opportunity cost of entrepreneurship. Third, inefficiencies in the transmission of...
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