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http://hdl.handle.net/10419/21130
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| Title: | | Welfare Policies, Labour Taxation and International Integration  |
| Authors: | | Andersen, Torben M. |
| Issue Date: | | 2001 |
| Series/Report no.: | | IZA Discussion paper series 278 |
| Abstract: | | How will international integration affect welfare policies? This paper considers the possibilities of financing public sector activities (public consumption and social security expenses) by general (wage) taxation in an economy which becomes more integrated in international product markets. Even if labour is internationally immobile, the increased mobility of products and hence jobs implies a change in the distortions arising from taxes and social security contributions levied on labour income. Since financing of social security via general taxation involves a negative externality the effects of international integration depend critically on the institutional structure of the labour market. This paper shows that increased international integration inducing more product market competition implies that it becomes more costly to maintain welfare systems financed by general taxation. |
| Subjects: | | Product market integration tax distortions social security and public consumption |
| JEL: | | J30 H30 H20 F10 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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