Impact of COVID-19 on Labour supply and demand and consumer behavior Amongst many issues, Covid-19 brought about a reduction in consumption of a number of goods and services (restaurants, movie theaters, airlines, tourism,…). In fact, a remarkable feature of Covid-19 was the significant increase in personal savings in the US economy (and several other economies […]
Demonstrate within an appropriate model the effect of taxes on labour supply. Discuss the differences between the predictions from this model and the discussion of the ETI in Feldstein.
Answer THREE of the following (from 6) 1] Feldstein (1999) suggests that estimates of the elasticity of labour supply underestimate the deadweight loss of the income tax compared to estimates based on the elasticity of taxable income (ETI). Demonstrate within an appropriate model the effect of taxes on labour supply. Discuss the differences between the […]