If the income taxes on wages increase, the labor supply curve will shift left, but what happens to the unemployment rate?

Question

Quizplus · Accepted Answer

If income taxes on wages increase, workers may become discouraged and leave the workforce, which would decrease the labor force participation rate. Some workers may also reduce their hours worked, as their after-tax income decreases. Both of these factors would lead to a decrease in the labor supply, which would typically lead to an increase in wages, but also a higher unemployment rate, as some workers leave the labor force entirely. Therefore, the effect on the unemployment rate is ambiguous, but it is likely to increase at least in the short run.

If the Income Taxes on Wages Increase, the Labor Supply