How does unemployment affect direct and indirect tax reform?

This paper incorporates the stylised fact of labour market rationing into an analysis of marginal tax reform in Ireland. In the absence of weak separability between goods and leisure, labour market rationing will have both substitution and income effects. This paper estimates "matched pairs" of demands for Ireland and investigates the sensitivity of marginal tax reform recommendations to the presence of rationing, both with without weak separability between goods and leisure.Foundation for Fiscal StudiesHCM Network on the Microeconometrics of Public PolicyA hard copy is available in UCD Library at GEN 330.08 IR/UN