A fair solution to the compensation problem
We study equity in economies where agents are endowed with different, non transferable, personal talents. To compensate them for such differences a given amount of money needs to be shared among them. We axiomatize a family of social orderings over allocations based on efficiency, fairness and robustness properties. Taking into account incentive constraints we derive the optimal policy: individuals with the same talent need to be equally compensated and only people whose level of talent is below a certain threshold should receive a positive compensation.
|Date of creation:||01 Sep 2007|
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- Marc Fleurbaey & François Maniquet, 2005. "Fair social orderings when agents have unequal production skills," Social Choice and Welfare, Springer, vol. 24(1), pages 93-127, 09.
- Marc Fleurbaey & François Maniquet, 2006. "Compensation and responsibility," Working Papers halshs-00121367, HAL.
- Francois Maniquet & Yves Sprumont, 2002.
"Welfare Egalitarianism in Non-Rival Environments,"
Economics Working Papers
0016, Institute for Advanced Study, School of Social Science.
- Roland Iwan Luttens & Erwin Ooghe, 2007.
"Is it Fair to 'Make Work Pay'?,"
London School of Economics and Political Science, vol. 74(296), pages 599-626, November.
- Roland Iwan Luttens & Erwon Ooghe, 2004. "Is it fair to "make work pay"??," Center for Economic Studies - Discussion papers ces0410, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
- R. I. Luttens & E. Ooghe, 2005. "Is it fair to “make work pay”?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 05/283, Ghent University, Faculty of Economics and Business Administration.
- Marc Fleurbaey & Francois Maniquet, 2002.
"Fair Income Tax,"
Economics Working Papers
0021, Institute for Advanced Study, School of Social Science.
- M. Fleurbaey & F. Maniquet, 2008. "Fair social orderings," Economic Theory, Springer, vol. 34(1), pages 25-45, January.
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