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Author: | Boone, J. Mooij, R.A. de |
Title: | Tax policy in a matching model with training |
Journal: | Oxford Economic Papers
2003 : JAN, VOL. 55:1, p. 121-147 |
Index terms: | Taxation Policy Pay Labour markets Training Economic theory Models |
Language: | eng |
Abstract: | This paper develops a model of search on the labour market with training. How the combination of an average job tax and a marginal wage tax can be used to alleviate inefficiencies in job matching and, at the same time, raise a positive revenue with minimal distortions in search and training. It is found that: 1. a wage tax is less distortionary to raise revenue than is a job tax if training is not distorted initially, 2. this conclusion may reverse in the presence of training distortions, and 3. marginal wage taxes are less distortionary in economies where bargaining parties can commit to the wage profile. |
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