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The Unemployment and Wage Effects of Shifting to an Indirect Tax in an Efficiency Wage Model

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  • JUIN‐JEN CHANG
  • CHUNG‐CHENG LIN
  • CHING‐CHONG LAI

Abstract

This paper examines the unemployment and wage effects of the tax shift from an income tax to a consumption tax in a shirking‐type efficiency wage model. It is found that the results of the ex‐ante individual income‐neutral and aggregate revenue‐neutral proposals in this paper's efficiency wage model confirm those in the monopoly trade union model analyzed by Sampson (1986), Creedy and McDonald (1990, 1992), and Pemberton (1992). The ex‐post tax‐shifting schemes are also discussed.

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  • Juin‐Jen Chang & Chung‐Cheng Lin & Ching‐Chong Lai, 1999. "The Unemployment and Wage Effects of Shifting to an Indirect Tax in an Efficiency Wage Model," The Economic Record, The Economic Society of Australia, vol. 75(2), pages 156-166, June.
    • Handle: RePEc:bla:ecorec:v:75:y:1999:i:2:p:156-166
    DOI: 10.1111/j.1475-4932.1999.tb02444.x
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    References listed on IDEAS

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    2. Yellen, Janet L, 1984. "Efficiency Wage Models of Unemployment," American Economic Review, American Economic Association, vol. 74(2), pages 200-205, May.
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    2. Laszlo Goerke, 2006. "Earnings‐related Severance Pay," LABOUR, CEIS, vol. 20(4), pages 651-672, December.
    3. Laszlo Goerke, 2002. "Redundancy Pay and Collective Dismissals," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(1), pages 68-90, February.

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