Resource title

Tax Progressivity and the Trade Union's Fallback-Option

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Resource description

When we analyse the labour market consequences of labour tax reforms in a model of firm-union wage bargaining, minor changes in the formulation of the union`s fallback option can have drastic effects. This paper compares two variants of the model in which either workers have no reemployment opportunity or the probality of employment in another sector is determined by the overall unemployment rate. It is argued both on analytical and numerical grounds that the second alternative is the only plausible one. This conclusion is confirmed by an explicit integration of workers´inter-sectoral mobility into the model.

Resource author

Stefan Boeters

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/24791

Resource license

Adapt according to the presented license agreement and reference the original author.