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Taxation and Unemployment Benefits
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Agenor and Santaella ambiguous effect Appendix assumed benefits for skilled budget constraint 20 categories of labor Cobb-Douglas demand for skilled demand for unskilled denotes depreciation determine developing countries discounted utility efficient frontier employment of skilled equilibrium condition expected utility derived firms fiscal and labor formal sector consists government spending hired implies income tax rate increase International Financial statistics labor market policies labor market segmentation labor mobility leftward level of effort level of employment long-run macroeconomic marginal utility market-clearing wage markets in developing minimum wage mobility across sectors nontraded goods produced opportunity cost overall unemployment rate production of traded rate of unskilled real exchange rate reduction in government result Santaella 1993 sg(Ls skilled and unskilled skilled labor skilled workers substitution between skilled supply taxation and unemployment terms of traded unemployed unemployment benefit rate unemployment compensation unemployment Laffer curve unskilled workers urban labor markets wage for skilled wage for unskilled yields