According to the standard principal-agent model, the optimal composition of pay should balance the provision of incentives with the individual demand for insurance. Do income taxes alter this balance? We show that the relative share of PRP on total pay is reduced by higher average taxes, and is...

We study the empirical relationship between labor taxation and pretax wages in Italy. We find that higher tax progressivity increases pretax wages. To explain this result, we introduce in an informal way a relative wage effect and argue that the combination of this effect with the labor supply...

We model a two sector economy with unionized labor markets and competitive product markets, where workers and unions care about their relative wages, and show that the presence of a relative wage concern could help generation a positive relationship between tax progressivity and wage pressure.

In this paper we consider income distribution in Italy, and evaluate the redistributive impact of in-kind transfers by using SHIW data provided by the Banca d’Italia. The analysis is conducted at the household level, comparing families with different needs by means of equivalence scales. We...

This paper presents a Structural VAR analysis on the employment and output effects of labour tax policies in six European countries for the period 1974-1997. By considering impulse response functions, it turns out that, on average, a shock to the total personal income tax revenues is positively...

This paper presents some empirical evidence for Italy from 1974 to 1995 on the relationship between the dynamics of unemployment and tax progressivity. To this purpose, the econometric tool is a Bayesian numerical approach based on a three-equation vector autoregression model where the...

We use the regional and time variation of training grants in Italy to identify the causal effect of (formal continuing vocational) training on earnings. We estimate log-linear earnings regressions with constant marginal returns to training and find that one additional week of training increases...