Dr Keshab Bhattarai K.R.Bhattarai@hull.ac.uk
Senior Lecturer in Economics
The role of labour demand elasticities in tax incidence analysis with heterogeneous labour
Bhattarai, Keshab; Whalley, John
Authors
John Whalley
Abstract
Whether labour bears full burden of household level income and consumption taxes ultimately depends on the degree of substitutability among different types of labour in production. We find more variation in incidence patterns across households with less than perfectly substitutable heterogeneous labour than with perfectly substitutable homogeneous labour in production. This finding is based on results obtained from homogeneous and heterogeneous labour general equilibrium tax models calibrated to decile level income and consumption distribution data of UK households for the year 1994. We use labour supply elasticities implied by the substitution elasticity in households' utility functions and derive labour demand elasticities from the substitution elasticity in the production function.
Citation
Bhattarai, K., & Whalley, J. (1999). The role of labour demand elasticities in tax incidence analysis with heterogeneous labour. Empirical economics, 24(4), 599-619. https://doi.org/10.1007/s001810050075
Journal Article Type | Conference Paper |
---|---|
Publication Date | 1999-11 |
Deposit Date | Feb 16, 2021 |
Journal | Empirical Economics |
Print ISSN | 0377-7332 |
Publisher | Springer Verlag |
Peer Reviewed | Peer Reviewed |
Volume | 24 |
Issue | 4 |
Pages | 599-619 |
DOI | https://doi.org/10.1007/s001810050075 |
Keywords | Elasticities; Labour demand; Labour supply; Welfare; Tax incidence; Redistribution |
Public URL | https://hull-repository.worktribe.com/output/3564560 |
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