The redistribution of trade gains when income inequality matters

Artikel

How does a redistribution of trade gains affect welfare when income inequality matters? To answer this question, we extend the [1] model to unionized labor markets and heterogeneous workers. As redistribution schemes, we consider unemployment benefits that are financed either by a wage tax, a payroll tax or a profit tax. Assuming that welfare declines in income inequality, we find that welfare increases up to a maximum in the case of wage tax funding, while welfare declines weakly (sharply) if a profit tax (payroll tax) is implemented. These effects are caused by the wage tax neutrality (due to union wage setting) and by a profit tax-induced decline in long-term unemployment. As a result, the government's optimal redistribution scheme is to finance unemployment benefits by a wage tax.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Journal: Economies ; ISSN: 2227-7099 ; Volume: 3 ; Year: 2015 ; Issue: 4 ; Pages: 186-215 ; Basel: MDPI

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Trade and Labor Market Interactions
• Thema: trade liberalization ; redistribution ; income inequality ; heterogeneity ; trade unions

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): De Pinto, Marco
• Ereignis: Veröffentlichung
• (wer): MDPI
• (wo): Basel
• (wann): 2015

Weitere Informationen

• DOI: doi:10.3390/economies3040186
• Handle: http://hdl.handle.net/10419/167727
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ