Wives, husbands and wheelchairs: Optimal tax policy under gender-specific health
We study the optimal taxation problem in an economy composed of two-person households (men and women), where agents influence their own old-age dependency prospects through health spending. It is shown that the utilitarian social optimum can be decentralized by means of lump sum transfers from men to women, because women exhibit a higher disability-free life expectancy than men for a given level of health spending. Once self-oriented concerns for coexistence are introduced, the decentralization of the first-best requires also gender-specific subsidies on health spending aimed at internalizing the effect of each agent's health on the spouse's welfare. In the presence of singles in the population, the optimal policy requires also a differentiated subsidization of health spending for singles and couples. Finally, under imperfect observability of couples, the incentive compatibility constraints reinforce the need for subsidization of health spendings.
|Date of creation:||Nov 2009|
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|Note:||View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00575059|
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- Marie-Louise Leroux & Pierre Pestieau & Grégory Ponthiere, 2009.
"Should we Subsidize Longevity?,"
CESifo Working Paper Series
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- d’ASPREMONT, Claude & DOS SANTOS FERREIRA, Rodolphe, 2009.
"Household behavior and individual autonomy,"
CORE Discussion Papers
2009022, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- LEROUX, Marie-Louise & PONTHIERE, Grégory, 2008. "Optimal tax policy and expected longevity: a mean and variance approach," CORE Discussion Papers 2008039, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- repec:pse:psecon:2008-46 is not listed on IDEAS
- Marie-Louise Leroux & Grégory Ponthière, 2008. "Optimal tax policy and expected longevity: A mean and variance utility approach," PSE Working Papers halshs-00586247, HAL.
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