UNSPECIFIED. (2000) Progressive taxation and wage setting: Some evidence for Denmark. SCANDINAVIAN JOURNAL OF ECONOMICS, 102 (4). pp. 707-723. ISSN 0347-0520

Abstract

The proposition that a progressive tax system contributes to wage moderation is studied using Danish earnings data disaggregated by occupation, gender and earnings level. Our main conclusions are that income-tax progression affects wage setting, but whether it moderates or exaggerates wage pressure is income dependent, An increase in progressivity reduces the pre-tax earnings of middle-income workers (manual mate workers and moderate income carriers among both male and female non-manual workers). The reverse is found for high-income earners (non-manual male workers), in that an increase in progressivity tends to raise pre-tax earnings. Finally, there is no significant effect of tax progressivity on the wages of low-income earners.

Data sourced from Thomson Reuters' Web of Knowledge

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