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Taxes on employment income can affect the demand for labour as a result of the ''tax wedge'' that is driven between  he cost of labour to employers and the net payment received by employees. The magnitude of the effect  upon unemployment depends upon the ''price flexibility'' in the relevant labour market, because it depends upon the extent to which employees seek to pass a tax increase on to their employers <ref>Daveri and  Tabellini:  ''Unemployment and Taxes: Do taxes affect the rate of unemployment?'', Economic Policy Vol. 15 Issue 30, 2000</ref>
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==Index and Glossary==
There is an index to the topics dealt with in the economics articles [[Economics/Related Articles|here]], and a glossary of economic terms [[Economics/Glossary|here]].


See also the  [[Politics/Index|'''index to the politics articles ''']].


Taxes on employment income can affect the supply of labour as a result both of its ''price effect'' - to the extent that it makes  employees try  to compensate for their loss of after-tax earnings - and its ''substitution effect''  - to the extent that it makes employees willing to sacrifice their reduced net earnings  in exchange for the unchanged the benefits of increased leisure. Empirical evidence tends to indicate that it has a negative effect the effect that is larger for female labour than for male labour and that it is greater for both when tax rates are progressive<ref>[http://www.ifs.org.uk/mirrleesreview/reports/labour_supply.pdf Costas Meghir  and David Phillips: ''Labour Supply and Taxes'', Institute for Fiscal Studies, 2008]</ref>. The combined influence of employment income taxation and ''means-tested '' state benefits can also affect the supply of labour as a result of the operation of the ''unemployment and poverty traps''.
[[User:Nick_Gardner#Methodology|methodology]]
 
{|align="right" cellpadding="10" style="background-color:#FFFFCC; width:40%; border: 1px solid #aaa; margin:20px; font-size: 92%;"
|"''The European Union is something ...
  very precious, not only for us in Europe, but also for the rest of the world. Because the European Union is, in fact, the result of a project for peace that brought together nations emerging from the ruins of the Second World War. It was the European Union that united them in peace around the values of respect for human dignity, freedom, democracy, justice, rule of law and respect for human rights.''"
 
:Merci Olsson, of Nobel Med, congratulating  President Barroso on the award of The Nobel Peace Prize t the European Union, 12 October 2012.
|}

Latest revision as of 03:28, 22 November 2023


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Index and Glossary

There is an index to the topics dealt with in the economics articles here, and a glossary of economic terms here.

See also the index to the politics articles .

methodology

"The European Union is something ...
very precious, not only for us in Europe, but also for the rest of the world. Because the European Union is, in fact, the result of a project for peace that brought together nations emerging from the ruins of the Second World War. It was the European Union that united them in peace around the values of respect for human dignity, freedom, democracy, justice, rule of law and respect for human rights."
Merci Olsson, of Nobel Med, congratulating President Barroso on the award of The Nobel Peace Prize t the European Union, 12 October 2012.