Recall the Application about European soccer stars choosing to play for clubs in countries with lower tax rates to reduce their taxes to answer the following question(s). A study conducted by economists Henrik Jacobsen Kleven, Camille Landais,and Emmanuel Saez found that top tax rates and tax breaks do matter when soccer stars choose where to locate.
-Recall the Application. If country A has a lower overall income tax rate than country B, and labor can freely and easily move between the two countries, real wages in country A will tend to ________ and employment in country A will tend to ________.

Question

Quizplus · Accepted Answer

Real wages in country A will tend to decrease due to increased labor supply, while employment will tend to increase as more workers move to take advantage of the lower tax rates.

Recall the Application About European Soccer Stars Choosing to Play