The main proposals for the reform of payroll-based employers' social security contributions have been the (partial) replacement of the contribution by increased sales tax and the so called SII-contribution, in which the base would consist of the wage bill and the operating margin of the firm. In...

The paper formulates a model of wage determination in which the firm decides on employment after a monopoly union has determined wages. The novelty is to incorporate investment and capital decisions by firms. The subgame-perfect Nash equilibrium and its comparative statics for wages, capital...

This paper investigates the employment effects of changes in the structure of taxation and in the tax progression. The contribution is to add endogenous determination of working hours into a union wage setting model. Thus employment effects of any changes in taxation are derived as a labour...

"In the 1990s, Finland underwent a deep depression as its GDP dropped about 14% and unemployment rose from 3 to almost 20%. This is a story of bad luck and bad policies. Bad luck took the form of external shocks: the collapse of trade with the former Soviet Union in 1991, but also sharp cycles...

This paper deals with some aspects of the Finnish economic crisis in the 1990s by starting with a quick description of the main macroeconomic features of the crisis together with some empirical evidence on price and wage as well as interest rate determination. With these as a background a...

This paper considers the sensitivity of the household's disposable income with respect to the labour market states and the labour market transitions of unemployed workers. The paper analyses the following questions: (i) which are the determinants of starting wages? (ii) how many unemployed are...

Since the Finnish unemployment rate has rocketed to a very high level in the beginning of the 1990's, it is worth to study to what extent the unemployment rate prevailing today is due to cyclical or to structural reasons. In this paper we try to estimate two different indicators that represent...