The paper develops a two-sector general equilibrium search model where goods are produced exclusively in the market and services are produced both in the market and within the households. We use the model to examine how unemployment and welfare are affected by labor taxes in general and sectoral...

The paper extends the basic Stiglitz (1982) model of optimal income taxation into general search equilibrium. When we extend the basic taxation model to include a more realistic treatment of the labor market, a number of new interesting mechanisms arise. When wages are fixed we find that a work...

This paper explores the rationale for unemployment benefits as a complement to optimal non-linear income taxation. High-skilled workers and low-skilled workers face different exogenous risks of being unemployed. As long as the low-skilled workers face a higher unemployment risk, we find that...

The paper extends the basic Stiglitz (1982) model of optimal nonlinear income taxation into a model featuring endogenous unemployment and wages. This means that the government needs to consider the effects on wages and unemployment when designing the optimal tax function. The tax systems'...

The paper presents a tractable general equilibrium model of search unemployment that incorporates absence from work as a distinct labor force state. Absenteeism is driven by random shocks to the value of leisure that are private information to the workers. Firms offer wages, and possibly sick...

One goal of the public employment service is to facilitate matching between unemployed job seekers and job vacancies; another goal is to monitor job search so as to bring search efforts among the unemployed in line with search requirements. The referral of job seekers to vacancies is one...

One goal of the public employment service is to facilitate matching between unemployed job seekers and job vacancies; another goal is to monitor job search so as to bring search efforts among the unemployed in line with search requirements. The referral of job seekers to vacancies is one...

The increased demand for a more equal parental sharing of the responsibilities for children has led many countries to reconstruct their parental leave systems so to provide stronger incentives for fathers to participate in childcare. Father's quotas are becoming widely spread across Europe. This...

We study the. Incentive effects of endogenous group formation in a voluntary contributon experiment. Subjects are given information on the past contributions of others and allowed to express a preference for partners. On the basis of the stated preferences new groups are formed. We find that the...

We present results from a novel experiment on the effect of a policy designed to encourage cooperation in a prisoner's dilemma game. We find that the effect of this policy on the level of cooperation is greater when it was chosen democratically by the subjects than when it was exogenously...