Entrepreneurial culture, occupational choice and tax policy
AbstractThis paper studies the influence of entrepreneurial culture among social groups in an economy. The cultural factor determines their occupational preferences. We develop a model in which a concentration factor has been used as a measure of business culture determining the occupational choice patterns of otherwise identical social groups. The occupational distribution of individuals from different groups is obtained by comparing expected utilities from employment and entrepreneurship. Based on the labor market outcomes the mean income and income variance of different groups is calculated. Individuals from groups with greater cultural traits display higher relative risk aversion with a high income variance compared to other groups. We propose a tax- subsidy policy and obtain conditions for maximizing social utility.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 24104.
Date of creation: 2006
Date of revision:
Entrepreneurial culture; Self-employment; Risk aversion; Income variance; National Income; Tax-subsidy Policy;
Find related papers by JEL classification:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
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