Abstract
Over the past 3 decades, labour supply in Europe has declined by approximately 30% relative to the USA. The decline comes from hours per worker and employment. The present paper uses a matching model to study the effects of labour taxes and unemployment benefits. Labour taxes decrease hours and employment, with overstated adverse effects on hours if extensive margins are not considered. Unemployment benefits decrease employment and increase hours, with understated adverse effects on employment if intensive margins are not considered. In the baseline parameterization, labour taxes and unemployment benefits together explain approximately 75% of the declining labour supply in Europe relative to the USA.
| Original language | English |
|---|---|
| Pages (from-to) | 282-309 |
| Number of pages | 28 |
| Journal | Pacific Economic Review |
| Volume | 20 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 2015 May 1 |
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ASJC Scopus subject areas
- Geography, Planning and Development
- Development
- Aerospace Engineering
Cite this
Relative Effects of Labour Taxes and Unemployment Benefits on Hours Worked Per Worker and Employment. / Chen, Been Lon; Hsu, Mei; Lai, Chih Fang.
In: Pacific Economic Review, Vol. 20, No. 2, 01.05.2015, p. 282-309.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Relative Effects of Labour Taxes and Unemployment Benefits on Hours Worked Per Worker and Employment
AU - Chen, Been Lon
AU - Hsu, Mei
AU - Lai, Chih Fang
PY - 2015/5/1
Y1 - 2015/5/1
N2 - Over the past 3 decades, labour supply in Europe has declined by approximately 30% relative to the USA. The decline comes from hours per worker and employment. The present paper uses a matching model to study the effects of labour taxes and unemployment benefits. Labour taxes decrease hours and employment, with overstated adverse effects on hours if extensive margins are not considered. Unemployment benefits decrease employment and increase hours, with understated adverse effects on employment if intensive margins are not considered. In the baseline parameterization, labour taxes and unemployment benefits together explain approximately 75% of the declining labour supply in Europe relative to the USA.
AB - Over the past 3 decades, labour supply in Europe has declined by approximately 30% relative to the USA. The decline comes from hours per worker and employment. The present paper uses a matching model to study the effects of labour taxes and unemployment benefits. Labour taxes decrease hours and employment, with overstated adverse effects on hours if extensive margins are not considered. Unemployment benefits decrease employment and increase hours, with understated adverse effects on employment if intensive margins are not considered. In the baseline parameterization, labour taxes and unemployment benefits together explain approximately 75% of the declining labour supply in Europe relative to the USA.
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UR - http://www.scopus.com/inward/citedby.url?scp=84922385237&partnerID=8YFLogxK
U2 - 10.1111/1468-0106.12107
DO - 10.1111/1468-0106.12107
M3 - Article
AN - SCOPUS:84922385237
VL - 20
SP - 282
EP - 309
JO - Pacific Economic Review
JF - Pacific Economic Review
SN - 1361-374X
IS - 2
ER -