Optimal redistribution when different workers are indistinguishable
Using the standard non linear income and commodity taxation framework this paper examines the optimal policy to be adopted when the same labor disutility can receive two opposite interpretations: taste for leisure and activity limitation. In the absence of complete information about individual characteristics, an income tax does not allow to distinguish lazy from handicapped individuals. One may however rely on a combination of commodity and income taxes to redistribute from the former to the latter when they differ in their preferences for commodities.
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|Note:||In : Canadian Journal of Economics, 36(4), 911-922, 2003|
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- Beaudry, Paul & Blackorby, Charles, 2006.
"Taxes and Employment Subsidies in Optimal Redistribution Programs,"
The Warwick Economics Research Paper Series (TWERPS)
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- Beaudry, Paul & Blackorby, Charles, 2004. "Taxes And Employment Subsidies In Optimal Redistribution Programs," The Warwick Economics Research Paper Series (TWERPS) 708, University of Warwick, Department of Economics.
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- BOADWAY, R. & MARCHAND, M. & PESTIEAU, P. & del MAR RACIONERO, M., 2001. "Optimal redistribution with heterogeneous preferences for leisure," CORE Discussion Papers 2001025, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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- Katherine Cuff, 1998.
"Optimality of Workfare with Heterogeneous Preferences,"
968, Queen's University, Department of Economics.
- Katherine Cuff, 2000. "Optimality of workfare with heterogeneous preferences," Canadian Journal of Economics, Canadian Economics Association, vol. 33(1), pages 149-174, February.
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