According to a widely held popular belief, a pure increase in tax progression decreases work effort, increases wages and is thus bad for employment under competitive labour markets. This paper studies the effects of labour taxes in a general equilibrium model of two countries with monopoly...

This paper investigates unemployment and labour market rigidities in OECD countries in 1983-1994. The central issue is the taxation-unemployment relationship and whether this relationship is exogenous or simultaneously determined. Hausman specification tests indicate that the impact of taxation...