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Employment in the US and Europe: The Roles of Taxes and Benefits

Author

Listed:
  • Toshihiko Mukoyama

    (University of Virginia)

  • Richard Rogerson

    (Arizona State University)

  • Aysegul Sahin

    (Federal Reserve Bank of New York)

  • Per Krusell

    (Princeton University)

Abstract

We build a model that incorporates both labor supply and frictions and use it to assess the effects of various tax and transfer programs on aggregate employment and unemployment. In particular, we assess the debate between Prescott and Ljungqvist and Sargent about the relative importance of taxes versus benefits in understanding the large differences in hours of work between Europe and the US.

Suggested Citation

  • Toshihiko Mukoyama & Richard Rogerson & Aysegul Sahin & Per Krusell, 2009. "Employment in the US and Europe: The Roles of Taxes and Benefits," 2009 Meeting Papers 71, Society for Economic Dynamics.
    • Handle: RePEc:red:sed009:71
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