Union Strategy and Optimal Income Taxation

WZB Markets and Political Economy Working Paper No. SP II 2005-04

24 Pages Posted: 10 May 2005

See all articles by Sebastian G. Kessing

Sebastian G. Kessing

Wissenschaftszentrum Berlin fuer Sozialforschung (WZB) - Market Processes and Governance; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Kai A. Konrad

Max Planck Institute for Tax Law and Public Finance; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: January 2005

Abstract

Restrictions on work hours are more important in countries with a large welfare state. We show that this empirical observation is consistent with the strategic effects of such restrictions in a welfare state in the context of optimal direct taxation in the tradition of Mirrlees (1971). Our results also apply to nonwelfarist states which have income redistribution, but not in purely extortionary states.

Keywords: Optimal income taxation, labor unions, work hours

JEL Classification: H21, H23

Suggested Citation

Kessing, Sebastian G. and Konrad, Kai A., Union Strategy and Optimal Income Taxation (January 2005). WZB Markets and Political Economy Working Paper No. SP II 2005-04, Available at SSRN: https://ssrn.com/abstract=721003 or http://dx.doi.org/10.2139/ssrn.721003

Sebastian G. Kessing (Contact Author)

Wissenschaftszentrum Berlin fuer Sozialforschung (WZB) - Market Processes and Governance ( email )

Reichpietschufer 50
D-10785 Berlin
Germany

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

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Munich, DE-81679
Germany

Kai A. Konrad

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

HOME PAGE: http://www.tax.mpg.de/en/pub/home.cfm

Centre for Economic Policy Research (CEPR)

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CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

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Munich, 81679
Germany

IZA Institute of Labor Economics

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Bonn, 53072
Germany

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