An Experimental Investigation of Wage Taxation and Unemployment in Closed and Open Economies

Arbeitspapier

We investigate experimentally the economic effects of wage taxation to finance unemployment benefits for a closed economy and an international economy. The main findings are the following. (i) There is clear evidence of a vicious circle in the dynamic interaction between the wage tax and unemployment. (ii) Employment is boosted by budget deficits but subsequent tax rate adjustments to balance the budget lead to employment levels substantially lower than theoretically predicted. (iii) A sales risk for producers due to price uncertainty on output markets appears to cause a downward pressure on factor employment. For labor the wage tax exacerbates this adverse effect.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Tinbergen Institute Discussion Paper ; No. 00-112/1

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Design of Experiments: General ; General Equilibrium and Disequilibrium: General ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Open Economy Macroeconomics
• Thema: Experiments ; international economics ; wage taxation ; unemployment ; Lohnsteuer ; Arbeitslosigkeit ; Offene Volkswirtschaft ; Test ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Riedl, Arno ; van Winden, Frans
• Ereignis: Veröffentlichung
• (wer): Tinbergen Institute
• (wo): Amsterdam and Rotterdam
• (wann): 2000

Weitere Informationen

• Handle: http://hdl.handle.net/10419/85500
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ