Equilibrium allocations in competitive labor market models are independent of whether labor taxes on firms are levied as employment taxes or payroll taxes, for given tax revenue. Turning to non-competitive labor market models, like wage bargaining of efficiency wage models, the two taxes cease...

In equilibrium models of unemployment, e.g., efficiency wage models, the level of unemployment generally depends on the level of taxes on labor (see, e.g., Johnson and Layard (1986) and Pisauro (1991)). Considering labor taxes levied on firms, the tax authorities may choose between employment...