Is It Legitimate to Encourage Work Sharing?
A generalization of J. A. Mirrlees's (1971) income taxation model is formulated in which qualifications of workers are both endogenous and observable by the government. Individuals differ by their unobservable abilities, which simultaneously affect their disutility of labor and their cost of training. In general, the optimal tax schedule depends not only on income but also on its 'components,' i.e., wage rate (or qualification) and labor supply. The authors find conditions under which it is optimal to subsidize lower qualifications or to encourage work sharing. Copyright 1995 by The editors of the Scandinavian Journal of Economics.
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Volume (Year): 97 (1995)
Issue (Month): 4 (December)
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