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The Unemployment and Wage Effects of Shifting to an Indirect Tax in an Efficiency Wage Model

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  • JUIN‐JEN CHANG
  • CHUNG‐CHENG LIN
  • CHING‐CHONG LAI
Abstract
This paper examines the unemployment and wage effects of the tax shift from an income tax to a consumption tax in a shirking‐type efficiency wage model. It is found that the results of the ex‐ante individual income‐neutral and aggregate revenue‐neutral proposals in this paper's efficiency wage model confirm those in the monopoly trade union model analyzed by Sampson (1986), Creedy and McDonald (1990, 1992), and Pemberton (1992). The ex‐post tax‐shifting schemes are also discussed.

Suggested Citation

  • Juin‐Jen Chang & Chung‐Cheng Lin & Ching‐Chong Lai, 1999. "The Unemployment and Wage Effects of Shifting to an Indirect Tax in an Efficiency Wage Model," The Economic Record, The Economic Society of Australia, vol. 75(2), pages 156-166, June.
    • Handle: RePEc:bla:ecorec:v:75:y:1999:i:2:p:156-166
    DOI: 10.1111/j.1475-4932.1999.tb02444.x
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    References listed on IDEAS

    as
    1. Pisauro, Giuseppe, 1991. "The effect of taxes on labour in efficiency wage models," Journal of Public Economics, Elsevier, vol. 46(3), pages 329-345, December.
    2. Yellen, Janet L, 1984. "Efficiency Wage Models of Unemployment," American Economic Review, American Economic Association, vol. 74(2), pages 200-205, May.
    3. Creedy, John & McDonald, Ian M, 1992. "Union Wage Responses to a Shift from Direct to Indirect Taxation," Bulletin of Economic Research, Wiley Blackwell, vol. 44(3), pages 221-232, July.
    4. repec:bla:ecorec:v:68:y:1992:i:203:p:318-27 is not listed on IDEAS
    5. Lawrence F. Katz, 1986. "Efficiency Wage Theories: A Partial Evaluation," NBER Chapters, in: NBER Macroeconomics Annual 1986, Volume 1, pages 235-290, National Bureau of Economic Research, Inc.
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    8. Sampson, Anthony A & Simmons, Robert, 1992. "The Union Response to the Poll Tax," Scottish Journal of Political Economy, Scottish Economic Society, vol. 39(4), pages 431-438, November.
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    3. Xu Zifei & Tang Xiaoxu & Cui Yan, 2009. "The Effect of Tax Policy Choices on the Labor Market on the Perspective of Global Governance," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 16(2), pages 316-327, June.

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