By University of Chicago
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Extra resources for A Century of Labor-Leisure Distortions
Princeton, NJ: Princeton University Press, 1969. Center for the Study of American Business. Directory of Federal Regulatory Agencies. 3rd edition, 1981. DiNardo, John, Nicole M. Fortin, and Thomas Lemieux. ” Econometrica. 64(5), September 1996: 1001-44. Douglas, Paul Howard. The Theory of Wages. New York: Macmillan, 1934. Dunlop, John T. Wage Determination under Trade Unionism. New York: Macmillan, 1944. Century of Distortions - 51 Feldstein, Martin and Andrew Samwick. ” National Tax Journal. 45(1), March 1992: 1-22.
251, respectively. C. The Great Depression Implied tax rates rise dramatically in the early 1930's and persist for the decade. None of this increase can be attributed to federal labor income taxes, because only a small minority of the 1930's population was liable for such taxes. Sales, custom, and excise taxes increased during the 1930's, but the revenue involved is much too small for these tax increases to add more than a a percentage point or so to the wedge between MRS and MPL. 35 However, these explanations imply that the wedge would grow (beyond any growth due to income taxation) after the 1930's whenever labor regulation or the effects of monopoly unionism grew.
In other words, WWII leisure time is lower (or consumption higher) than implied by the labor equilibrium equation. Also, both functional forms imply substantial changes in MRS relative to MPL between 1944 and 1947, while measured tax rates did not really change until 1948. E. Leisure and Consumption Since 1980 Perhaps my more novel finding is that the value of time grew much more than the marginal product of labor during the 1980's, to such an extent that implied “tax” wedges were reduced by 20 percentage points.