Question: Gruber and Krueger 1991 1 found that mandated increases in the

Gruber and Krueger (1991)1 found that mandated increases in the costs of workers’ compensation benefits in the 1970s and 1980s led to substantial wage offsets for workers. Some of the wage reductions they found were even larger than the total cost to firms of providing the additional benefits. What does this suggest about the deadweight loss from the implicit “benefit tax” involved in imposing these mandatory benefits?

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