Activity: Talk or presentation › Science to science
Description
In a model with a unionised and immobile labour force we analyse labour tax-and-transfer policies when the government faces oligopolistic firms, part of which are internationally mobile. We show that a government, that seeks to maximise the domestic producer and consumer surplus may prefer a high tax- transfer regime consistent with offshoring, to an equilibrium with low taxes and no offshoring. Broadly speaking, by increasing labour taxes, the government discourages tough wage claims from the labour union, thereby contributing to an increase in overall output and profits, albeit at the cost of a decrease in domestic employment.
Period
21 May 2008 → 24 May 2008
Event title
International Trade and Finance Association (ITFA)