nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2016‒07‒23
three papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. Job Creation in a Multi-Sector Labor Market Model for Developing Economies By Basu, Arnab; Chau, Nancy H; Fields, Gary S; Kanbur, Ravi
  3. Political Economy of Tax Reforms – Workshop proceedings By Savina Princen

  1. By: Basu, Arnab; Chau, Nancy H; Fields, Gary S; Kanbur, Ravi
    Abstract: This paper proposes an overlapping generations multi-sector model of the labor market for developing countries with three heterogeneities - heterogeneity within self-employment, heterogeneity in ability, and heterogeneity in age. We revisit an iconic paradox in a class of multisector labor market models in which the creation of high-wage employment exacerbates unemployment. Our richer setting allows for generational differences in the motivations for job search to be reflected in two distinct inverted U-shaped relationships between unemployment and high-wage employment, one for youth and a different one for adults. In turn, the relationship between overall unemployment and high-wage employment is shown to be non-monotonic and multi-peaked. The model also sheds light on the implications of increasing high-wage employment on self-employed workers, who make up most of the world's poor. Nonmonotonicity in unemployment notwithstanding, increasing high-wage employment has an unambiguous positive impact on high-paying self-employment, and an unambiguous negative impact on free-entry (low-wage) self-employment.
    Keywords: Harris- Todaro Model.; Multisector Labor Market; Overlapping Generations; Poverty Reduction
    JEL: I32 O17
    Date: 2016–07
  2. By: Sonja Cindori (Faculty of Law, University of Zagreb)
    Abstract: The harmonization of Croatian excise system with the acquis communautaire has resulted in a number of consequences in fiscal and non-fiscal nature, with an emphasis on social and health component. Especially is highlighted the correlation between the increase of excise duties (ad valorem and specific duties) and tax evasion, wherefore the effect on revenue side of the state budget is negligible. Compensation for decreased demand for traditional manufactured tobacco is directed on consumption of their substitutes, whose health components are in question and their tax treatment is still dubious.Frequent use of substitute tobacco products like e-cigarettes cannot be considered as desired effect of preventive health policy, because the degree of their harmfulness is still the subject of research, and the consequences of their use will be visible over a long time. One of the biggest threats and challenges of health care policy stems from the alarming statistics which show increasing consumption of tobacco products among young people, which has an impact not only on their health and relationship to their own body, but also the awareness of the harmful effects on the passive smokers as well as the environment.
    Keywords: tax, excise, health, budget, tax evasion
  3. By: Savina Princen
    Abstract: In the context of tax policy challenges in many EU Member States, the 2015 ECFIN taxation workshop addressed the political economy obstacles substantial tax reforms face and possible avenues to successful reform implementation. It presented concrete examples of tax reforms in Italy and Greece, discussed the political economy dimensions of specific tax areas and looked into issues related to tax fraud and tax coordination. The workshop hosted Commissioner Moscovici for the keynote address.
    JEL: H21 H23 H24 H25 H26 P48
    Date: 2016–03

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