Effects of labor taxes and unemployment compensation on labor supply in a search model with an endogenous labor force

@article{Chen2015EffectsOL,
  title={Effects of labor taxes and unemployment compensation on labor supply in a search model with an endogenous labor force},
  author={Been-Lon Chen and Chih-Fang Lai},
  journal={Journal of Macroeconomics},
  year={2015},
  volume={43},
  pages={300-317}
}
Labor taxes and unemployment compensation were blamed for causing relative declines in labor supply in the EU to the US in the past decades. We propose a model with an endogenous labor force and compare with the model with an exogenous labor force. Because of discouraging the labor force, labor taxes decrease employment in our model less than the model with an exogenous labor force, have ambiguous effects on hours, and decrease less labor supply in our model. Due to boosting the labor force… Expand
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