This comment shows that some of Pisauro’s (Journal of Public Economics, 1991, 46, 329–345) reported results hold only if the unemployment rate exceeds 50%. If it does not, specific labor taxes reduce wages. Also, output falls when employment rises, all else equal, and minimum wage laws raise output.
The effect of taxes on labour in efficiency wage models: A comment.Faculty Publications
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Citation InformationCarter, T. J. (1999). The effect of taxes on labour in efficiency wage models: A comment. Journal of Public Economics, 72(2), 325-327.