Public consumption and unemployment

Zoega, Gylfi (1997) Public consumption and unemployment. Scottish Journal of Political Economy 44 (3), pp. 269-279. ISSN 0036-9292.

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Official URL: https://doi.org/10.1111/1467-9485.00057

Abstract

This paper introduces public consumption—hence the size of the public sector—into an efficiency wage model of the labour market. The effect of a simultaneous rise in taxes and public consumption on unemployment is derived. There arises an unambiguous positive relationship between the size of the public sector and equilibrium unemployment if public and private consumption are substitutes and wages are taxed. The impact of taxes on consumption on unemployment, although in general not equal to zero, is ambiguous.

Metadata

Item Type:	Article
School:	Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School
Depositing User:	Sarah Hall
Date Deposited:	01 Dec 2020 18:01
Last Modified:	02 Aug 2023 18:06
URI:	https://eprints.bbk.ac.uk/id/eprint/41917

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