Progressive taxation boosts employment and economic growth, study finds.
Social policies can impact employment and output differently depending on the type of labor market. In markets with trade unions and other factors, progressive taxation and certain policies can actually increase job growth and output. Unconditional unemployment benefits can harm job creation, but conditional benefits can help. The specific design of social policies, like how benefits are linked to wages and who bears the tax burden, also plays a crucial role. A fairer distribution of income can lead to better economic outcomes.