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Optimal taxation in occupational choice models: An Application to the Work Decisions of Couples

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  • Guy Laroque

    (UCL - University College London [UCL], IFS - Laboratory of the Institute for Fiscal Studies - Institute for Fiscal Studies, ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

  • Nicola Pavoni

    (Bocconi University [Milan, Italy], IFS - Laboratory of the Institute for Fiscal Studies - Institute for Fiscal Studies)

Abstract

We study a general model of occupational choice and optimal income taxation where agents have private cost of work that differ across occupations and have both deterministic and random components. We apply our framework to study the work decisions of couples in an extensive set up and give necessary and sufficient conditions under which joint-working households should be subsidized compared to single-worker households.

Suggested Citation

  • Guy Laroque & Nicola Pavoni, 2017. "Optimal taxation in occupational choice models: An Application to the Work Decisions of Couples," Working Papers hal-03915322, HAL.
    • Handle: RePEc:hal:wpaper:hal-03915322
    Note: View the original document on HAL open archive server: https://hal.science/hal-03915322v1
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    References listed on IDEAS

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    1. Casey Rothschild & Florian Scheuer, 2013. "Redistributive Taxation in the Roy Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(2), pages 623-668.
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    7. Emmanuel Saez, 2002. "Optimal Income Transfer Programs: Intensive versus Extensive Labor Supply Responses," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(3), pages 1039-1073.
    8. Laurence Ales & Musab Kurnaz & Christopher Sleet, 2015. "Technical Change, Wage Inequality, and Taxes," American Economic Review, American Economic Association, vol. 105(10), pages 3061-3101, October.
    9. Immervoll, Herwig & Kleven, Henrik Jacobsen & Kreiner, Claus Thustrup & Verdelin, Nicolaj, 2011. "Optimal tax and transfer programs for couples with extensive labor supply responses," Journal of Public Economics, Elsevier, vol. 95(11), pages 1485-1500.
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    2. Laurence Ales & Christopher Sleet, 2022. "Optimal Taxation of Income‐Generating Choice," Econometrica, Econometric Society, vol. 90(5), pages 2397-2436, September.

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