Banning information as a redistributive device
In this paper we analyze the optimality of allowing firms to observe signals of workers' characteristics in an optimal taxation framework. We show that it is always optimal to prohibit signals that disclose information about differences in the intrinsic productivities of workers like mandatory health exams and IQ tests, for example. On the other hand, it is never optimal to forbid signals that reveal information about the comparative advantages of workers like their specialization and profession. When signals are mixed (they disclose both types of information), there is a trade-off between efficiency and equity. It is optimal to prohibit signals with sufficiently low comparative advantage content.
(This abstract was borrowed from another version of this item.)
|Date of creation:||01 Jul 2004|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://epge.fgv.br
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Joseph G. Altonji & Charles R. Pierret, 1997.
"Employer Learning and Statistical Discrimination,"
NBER Working Papers
6279, National Bureau of Economic Research, Inc.
- Joseph G. Altonji & Charles R. Pierret, 1997. "Employer learning and statistical discrimination," Working Paper Series, Macroeconomic Issues WP-97-11, Federal Reserve Bank of Chicago.
- Joseph G. Altonji & Charles R. Pierret, . "Employer Learning and Statistical Discrimination," IPR working papers 97-18, Institute for Policy Resarch at Northwestern University.
- Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
- James Vercammen, 2002. "Welfare-Improving Adverse Selection in Credit Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1017-1033, November.
- Ireland, Norman J., 1994. "On limiting the market for status signals," Journal of Public Economics, Elsevier, vol. 53(1), pages 91-110, January.
- Farber, Henry S & Gibbons, Robert, 1996.
"Learning and Wage Dynamics,"
The Quarterly Journal of Economics,
MIT Press, vol. 111(4), pages 1007-47, November.
- Henry S. Farber & Robert Gibbons, 1994. "Learning and Wage Dynamics," Working Papers 707, Princeton University, Department of Economics, Industrial Relations Section..
- Henry S. Farber & Robert Gibbons, 1991. "Learning and Wage Dynamics," NBER Working Papers 3764, National Bureau of Economic Research, Inc.
- Holmstrom, Bengt, 1999.
"Managerial Incentive Problems: A Dynamic Perspective,"
Review of Economic Studies,
Wiley Blackwell, vol. 66(1), pages 169-82, January.
- Bengt Holmstrom, 1999. "Managerial Incentive Problems: A Dynamic Perspective," NBER Working Papers 6875, National Bureau of Economic Research, Inc.
- Andersson, Fredrik, 1996. "Income taxation and job-market signaling," Journal of Public Economics, Elsevier, vol. 59(2), pages 277-298, February.
- Mirrlees, James A, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Wiley Blackwell, vol. 38(114), pages 175-208, April.
- Ghatak, Maitreesh & Morelli, Massimo & Sjostrom, Tomas, 2001. "Occupational Choice and Dynamic Incentives," Review of Economic Studies, Wiley Blackwell, vol. 68(4), pages 781-810, October.
- Naito, Hisahiro, 1999. "Re-examination of uniform commodity taxes under a non-linear income tax system and its implication for production efficiency," Journal of Public Economics, Elsevier, vol. 71(2), pages 165-188, February.
- Hammond, Peter J, 1987. "Markets as Constraints: Multilateral Incentive Compatibility in Continuum Economies," Review of Economic Studies, Wiley Blackwell, vol. 54(3), pages 399-412, July.
When requesting a correction, please mention this item's handle: RePEc:fgv:epgewp:555. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Núcleo de Computação da EPGE)
If references are entirely missing, you can add them using this form.