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Labour supply, welfare and the earnings distribution

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Author Info

  • John Creedy

    ()
    (University of Melbourne)

Abstract

This paper examines the generation of earnings distributions using a labour supply framework in which individuals face piecewise-linear budget constraints. The possible implications for the distribution of earnings within a population consisting of single individuals having a joint distribution of wage rates and preferences are considered. Attention is given to the form of the distribution in terms of the number and position of modes and antimodes, and their relationship with the structure of taxes and transfers. Since it is necessary to obtain the optimal labour supply for a large number of individuals, attention is also given to the efficient computation of local optima for a tax structure having any number of effective marginal tax rates.

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Bibliographic Info

Article provided by Bankwest Curtin Economics Centre (BCEC), Curtin Business School in its journal Australian Journal of Labour Economics.

Volume (Year): 4 (2000-2001)
Issue (Month): 3 (September)
Pages: 134-151

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Handle: RePEc:ozl:journl:v:4:y:2001:i:3:p:134-151

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Postal: GPO Box U1987, Perth WA 6845
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Web page: http://business.curtin.edu.au/research/publications/journals/ajle/
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Related research

Keywords: Time Allocation; Work Behaviour; Employment Determination and Creation; Taxation; Subsidies; and Revenue; Externalities; Redistributive Effects of Economic Agents: General;

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Cited by:
  1. John Creedy, 2009. "The Personal Income Tax Structure: Theory and Policy," Department of Economics - Working Papers Series 1063, The University of Melbourne.

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