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original papers : Altruism, redistribution and social insurance

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Author Info

  • Udo Ebert

    ()
    (Department of Economics, University of Oldenburg, D-26111 Oldenburg, Germany)

  • Oskar von dem Hagen

    ()
    (Department of Economics, University of Oldenburg, D-26111 Oldenburg, Germany)

Abstract

The paper examines the influence of altruism on voluntary transfers and government redistribution in a simple model: two jobs of different productivity are assigned by chance to two individuals. Ex ante the individuals are identical, ex post they have different incomes. The first part of the paper examines voluntary transfers determined ex post or agreed upon ex ante in the absence of altruism. In the second part, the influence of altruism is examined. Altruism is modelled as a pure public good: the minimum consumption (or income, since there is only one consumption good). Both individuals can contribute to its provision, one person by earning wage income, the other by voluntary transfers. The ex ante solutions generally lead to higher expected welfare but create several incentive problems. Only lump-sum transfers are considered.

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Bibliographic Info

Article provided by Springer in its journal Review of Economic Design.

Volume (Year): 5 (2000)
Issue (Month): 4 ()
Pages: 365-385

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Handle: RePEc:spr:reecde:v:5:y:2000:i:4:p:365-385

Note: Received: 28 February 1997 / Accepted: 31 January 2000
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Related research

Keywords: Altruism; redistributive taxation; social insurance; public good; voluntary transfers;

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  1. Neil Bruce & Michael Waldman, 1986. "The Rotten-Kid Theorem Meets the Samaritan's Dilemma," Working Papers 650, Queen's University, Department of Economics.
  2. Hans-Werner Sinn, 1994. "A Theory of the Welfare State," NBER Working Papers 4856, National Bureau of Economic Research, Inc.
  3. Thurow, Lester C, 1971. "The Income Distribution as a Pure Public Good," The Quarterly Journal of Economics, MIT Press, vol. 85(2), pages 327-36, May.
  4. Smith, Vincent H. & Kehoe, Michael R. & Cremer, Mary E., 1995. "The private provision of public goods: Altruism and voluntary giving," Journal of Public Economics, Elsevier, vol. 58(1), pages 107-126, September.
  5. Dennis Kaufman, 1995. "Negative externalities and welfare improving preference changes," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 6(1), pages 53-71, July.
  6. Becker, Gary S, 1981. "Altruism in the Family and Selfishness in the Market Place," Economica, London School of Economics and Political Science, vol. 48(189), pages 1-15, February.
  7. Summers, Lawrence H, 1989. "Some Simple Economics of Mandated Benefits," American Economic Review, American Economic Association, vol. 79(2), pages 177-83, May.
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