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Kleven, Henrik Jacobsen
Birch Sørensen, Peter
Year of Publication: 
Series/Report no.: 
EPRU Working Paper Series 1999-01
We analyse recent proposals to shift the tax burden away from low-paid labour, assuming a dual labour market where the 'good' high-paying jobs are rationed. A shift in the tax burden from low-paid to high-paid workers has an ambiguous effect on the level of aggregate employment while the allocation of aggregate employment is likely to be further distorted. Even if the tax reform raises total employment, economic efficiency may be reduced because labour is reallocated from high-productive to low-productive jobs. Opportunities for on
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Working Paper
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