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| Author: | Aronsson, T. Sjögren, T. |
| Title: | Efficient taxation, wage bargaining and policy coordination |
| Journal: | Journal of Public Economics
2004 : DEC, VOL. 88:12, p. 2711-2725 |
| Index terms: | TRADE UNIONS Optimization Taxation |
| Language: | eng |
| Abstract: | This article aims to examine how policy coordination among countries can be used to increase the welfare level in comparison with an uncoordinated equilibrium. The authors study optimal nonlinear taxation under right-to-manage wage formation, assuming that the fall-back profit facing companies during wage negotiations depends on the profit they can obtain if moving production abroad. The results of the study show that fewer work hours per employee and/or a reduction of the unemployment benefit will increase welfare compared to the uncoordinated equilibrium. |
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