Unemployment, Growth and Taxation in Industrial Countries

@article{Daveri1997UnemploymentGA,
  title={Unemployment, Growth and Taxation in Industrial Countries},
  author={Francesco Daveri and Guido Tabellini},
  journal={Labor eJournal},
  year={1997}
}
To the layman, the upward trend in European unemployment is related to the slowdown in economic growth. We argue that the layman's view is correct. The increase in European unemployment and the slowdown in economic growth are related because they stem from a common cause: an excessively high cost of labor. In Europe, labor costs have gone up for many reasons, but one is particularly easy to identify: higher taxes on labor. If wages are set by strong and centralized trade unions, an increase in… 
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