Effect of unemployment insurance tax on wages and reallocation of labour
We develop a labour market equilibrium model and show how the federally collected Unemployment Insurance (UI) Tax affects labour force allocation between regular labour and contract labour. We also analyse the effect of UI tax on wages of the two types of labour. Our model suggests that the effect of a UI tax will be to increase the employment and wages of contract labour and to reduce the employment and wages of regular labour.
Year of publication: |
2009
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Authors: | Adhikari, Deergha Raj ; Everson, Wayne ; Gray, Lynn |
Published in: |
Applied Economics Letters. - Taylor & Francis Journals, ISSN 1350-4851. - Vol. 16.2009, 2, p. 147-150
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Publisher: |
Taylor & Francis Journals |
Saved in:
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