Kessing, Sebastian G.; Konrad, Kai A.
Union strategy and optimal income taxation.
WZB Discussion Paper, SP II 2005-04
Full text not available from 'Open Access LMU'.
Restrictions on work hours are more important in countries with a large welfare
state. We show that this empirical observation is consistent with the strategic
effects of such restrictions in a welfare state in the context of optimal direct
taxation in the tradition of Mirrlees (1971). Our results also apply to nonwelfarist
states which have income redistribution, but not in purely extortionary