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Good jobs, bad jobs and redistribution Author info | Abstract | Publisher info | Download info | Related research | Statistics Lommerud, Kjell Erik (University of Bergen)
Bj¯rn Sandvik
Odd Rune Straume
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We analyse the question of optimal taxation in a dual economy, when the government is concerned about the distribution of labour income. Income inequality is caused by the presence of sunk capital investments, which creates a 'good jobs' sector due to the capture of quasi-rents by trade unions. We find that whether the government should subsidise or tax investments is crucially dependent on union bargaining strength. If unions are weak, the optimal tax policy implies a combination of investment taxes and progressive income taxation. On the other hand, if unions are strong, we find that the best option for the government is to use investment subsidies in combination with either progressive or proportional taxation, the latter being the optimal policy if the government is not too concerned about inequality and if the cost of income taxation is sufficiently high.
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Paper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2002 with number
131.
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Date of creation: 29 Aug 2002Date of revision:
Handle: RePEc:ecj:ac2002:131Contact details of provider: Web page: http://www.res.org.uk/society/annualconf.asp More information through EDIRC
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Article Paper Lommerud, Kjell Erik & Sandvik, B. & Straume, Odd Rune, 2003.
"Good Jobs, Bad Jobs and Redistribution ,"
CEPR Discussion Papers
4115, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Lommerud, Kjell Erik & Sandvik, Bjorn & Staume, Odd Rune, 2003.
"Good Jobs, Bad Jobs and Redistribution ,"
CESifo Working Paper Series
CESifo Working Paper No. , CESifo GmbH.
[Downloadable!] Lommerud, K.E. & Sandvik, B. & Straume, O.R., 2001.
"Good Jobs, Bad Jobs and Redistribution ,"
Norway; Department of Economics, University of Bergen
1401, Department of Economics, University of Bergen.
This paper has been announced in the following NEP Reports :
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
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