Efficiency wages, employment, and the marginal income-tax rate: A note

In the framework of an efficiency-wage model, Hoel [Journal of Economics (1990) 51: 89-99] argues that a reduction in the marginal income-tax rate reduces employment. The present note shows that this result depends on how the tax reform is assumed to change the burden per worker. If the tax payment per worker is held constant, it cannot be ruled out that a lower marginal tax rate leads to an increase in employment.

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Year of publication:	1998
Authors:	Fuest, Clemens ; Huber, Bernd
Institutions:	Volkswirtschaftliche Fakultät, Ludwig-Maximilians-Universität München

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Series:	Munich Reprints in Economics.
Type of publication:	Book / Working Paper
Notes:	Published in Journal of Economics / Zeitschrift für Nationalökonomie 1 68(1998): pp. 79-84
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011019631