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Author:Engström, P.
Holmlund, B.
Kolm, A-S.
Title:Tax differentiation, search unemployment, and home production
Journal:Oxford Economic Papers
2005 : OCT, VOL. 57:4, p. 610-633
Index terms:taxation
unemployment
welfare
Language:eng
Abstract:This article develops a two-sector general equilibrium search model where "goods" are produced exclusively in the market and "services" are produced both in the market and within the households. The model is used to examine how unemployment and welfare are affected by labour taxes in general and sectoral tax differentiation in particular. It is found that a tax cut on services reduces unemployment whereas a tax cut on goods has no effect.
SCIMA record nr: 264678
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