Fiscal policy, economic integration and unemployment

Arbeitspapier

In this paper fiscal policy is examined for an open economy characterised by unemployment due to efficiency wages. We allow for capital and firm mobility in a model where the government chooses the level of wage, source-based capital and profit taxation. The taxing choices of governments are analyzed in scenarios which differ with respect to the constraints imposed on the set of available taxes and on the mobility of firms. As a general result, the welfare loss from labour market imperfections increases when tax bases become internationally mobile, which suggests an increasing relevance of domestic labour-market reforms when tax bases become global.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 937

Classification and Topics

• Classification: Wirtschaft ; Labor Contracts ; Unemployment Insurance; Severance Pay; Plant Closings ; Taxation and Subsidies: Efficiency; Optimal Taxation
• Subject: optimal taxation ; efficiency wages ; unemployment ; Finanzpolitik ; Optimale Besteuerung ; Kapitalertragsteuer ; Arbeitslosigkeit ; Effizienzlohn ; Steuerwettbewerb ; Kleines-offenes-Land ; Wirtschaftsintegration ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Eggert, Wolfgang ; Goerke, Laszlo
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/20174
• Last update: 10.03.2025, 11:42 AM CET