Question:

What happens to wages, employment, and GDP if employers must pay higher taxes for hiring labor?

by Guest60096  |  earlier

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What happens to wages, employment, and GDP if employers must pay higher taxes for hiring labor?

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2 ANSWERS


  1. The wages go down because the employers will look to undercut that by hiring undocumented workers.


  2. It will have "fall of demand" for labor effect - thus leading to dead-weight loss on labor market. Consequently equilibrium wage and quantity o labor will be reduced - thus wages and employment will decrease.

    Since there are less labor employed GDP will be reduced too.

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