Normative Analysis with Societal Constraints

Arbeitspapier

This paper examines the question of achieving a societal consensus around redistributive policies. Its extent is measured by the degree of work participation among the different skill classes that populate the economy. This consensus is driven both by the material incentives and heterogeneous preferences for leisure of each skill class, and an endogenous social norm, which embodies societal attitudes towards distributive justice. Results for optimal redistributive taxation in the presence of an extensive margin of participation show that when a norm is present, participation taxes are generally lower (resp. higher) than when it is not, whenever it enters as a benefit or cost for participants (resp. a cost for non-participants). In the event of multiple participation equilibria, it is examined how changes in the progressivity of taxation may induce shifts in equilibria. This multiplicity of equilibria is thereafter exploited as a constraint on the social planner, which views societal consensus as an objective.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 4305

Classification and Topics

• Classification: Wirtschaft ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement ; Taxation and Subsidies: Efficiency; Optimal Taxation
• Subject: optimal taxation ; societal consensus ; social norms ; work participation ; distributive justice ; redistribution

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Boadway, Robin ; Martineau, Nicolas-Guillaume
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/77666
• Last update: 10.03.2025, 11:43 AM CET