Taxes and Employment Subsidies in Optimal Redistribution Programs / Paul Beaudry, Charles Blackorby.

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Beaudry, Paul

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w6355.Publication details: Cambridge, Mass. National Bureau of Economic Research 1998.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: This paper characterizes an optimal redistribution program when taxation authorities: (1)" are uninformed about individuals' value of time in both market and non-market activities observe both market-income and time allocated to market employment, and (3) are utilitarian. " Formally, the problem is a special case of a multidimensional screening problem with two" dimensions of unobserved attributes. In contrast to much of the optimal income taxation" literature, we show that optimal redistribution in this environment involves distorting market" employment upwards for low net-income individuals (through negative marginal income taxes or" employment subsidies) and distorting employment downward for high net-income individuals" (through positive marginal income taxes). It is also shown that workfare is only part of an" optimal program if certain individuals have not access to market employment."

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w6355 (Browse shelf(Opens below))	Not For Loan

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January 1998.

This paper characterizes an optimal redistribution program when taxation authorities: (1)" are uninformed about individuals' value of time in both market and non-market activities observe both market-income and time allocated to market employment, and (3) are utilitarian. " Formally, the problem is a special case of a multidimensional screening problem with two" dimensions of unobserved attributes. In contrast to much of the optimal income taxation" literature, we show that optimal redistribution in this environment involves distorting market" employment upwards for low net-income individuals (through negative marginal income taxes or" employment subsidies) and distorting employment downward for high net-income individuals" (through positive marginal income taxes). It is also shown that workfare is only part of an" optimal program if certain individuals have not access to market employment."