Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/46942
Authors: 
Lorz, Jens Oliver
Stähler, Frank
Year of Publication: 
1997
Series/Report no.: 
Kiel Working Papers 824
Abstract: 
This paper deals with the impact of international capital mobility on labor taxes and the size of the public sector. It employs a model of the labor market, where national trade unions arc able to set wages above the competitive level. In a closed economy, a higher labor tax raises wage demands of the unions and thus increases the distortion on the labor market. With perfect international capital mobility, competition between trade unions leads to full employment, irrespective of the labor tax rale. The distorting effect of the labor tax vanishes and governments arc able to increase the supplied quantity of public services to the first best level.
Subjects: 
Capital Mobility
Labor Taxation
JEL: 
F20
J38
J51
Document Type: 
Working Paper

Files in This Item:
File
Size
664.93 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.