Home » The Effects of Tax Wedges on Hours Worked and Unemployment in Sweden by Alun H. Thomas
The Effects of Tax Wedges on Hours Worked and Unemployment in Sweden Alun H. Thomas

The Effects of Tax Wedges on Hours Worked and Unemployment in Sweden

Alun H. Thomas

Published October 1st 1998
ISBN : 9786613874405
ebook
26 pages
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 About the Book 

The rise in unemployment across a wide variety of industrialized countries over the past 25 years has led analysts to look for determinants of the phenomenon on a cross-country basis. One of the determinants that has come to the fore in policyMoreThe rise in unemployment across a wide variety of industrialized countries over the past 25 years has led analysts to look for determinants of the phenomenon on a cross-country basis. One of the determinants that has come to the fore in policy discussions is labor taxation. This partly reflects the concurrent increase in both labor taxes and unemployment across a wide variety of OECD countries: between 1978 and 1992 taxes on labor rose by 2 percent on average with particularly large increases for Italy, Finland, and Canada (see OECD 1995). Many analysts have argued that the rise in labor taxation is related to the rise in unemployment because it increases the cost of labor and as a result, it reduces the demand for labor. However, there is considerable debate about the length of time required for the labor market to adjust to an increase in the labor tax rate.