Incentives, Redistribution and Social Insurance
We extend the familiar income taxation model à la Mirrlees, so as to include income uncertainty, due for instance to a risk of illness. Following a line of research initiated by Blomqvist and Horn  we prove that the existence of a Social Health Insurance system may be justified even when the insurance market is efficient. Moreover, if there is a negative statistical dependence between probability of illness and labor productivity, then the optimum of a Utilitarianist Social Welfare function implies that Social Insurance provides a complete coverage for every household. The Geneva Papers on Risk and Insurance Theory (1991) 16, 143–165. doi:10.1007/BF02386304
Volume (Year): 16 (1991)
Issue (Month): 2 (December)
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