Holmlund, Bertil - 2000 - This version: January 17, 2000
Conventional models of equilibrium unemployment typically imply that pro-portional taxes on labor earnings are neutral … with respect to unemployment as long as the tax does not affect the replacement rate provided by unem-ployment insurance, i ….e., unemployment benefits relative to after-tax earnings. When home production is an option, the conventional results may no longer …