Progressive taxation boosts employment rates in unionised economies.
Progressive taxation can impact employment in a unionised economy. The study shows that changes in labour taxes can affect the job market equilibrium. The level of taxation and the type of tax (like income or payroll) play a role in this relationship. By analyzing data from Italy and the US, the study found that reducing average tax rates can lead to more jobs. The model's predictions closely match real-world observations from a fiscal reform period.