Artikel
Does redistribution increase output? The centrality of labor supply
The aftermath of the recent recession has seen calls to use transfers to poorer households as a means to enhance aggregate economic activity. The goal of this paper is to study the effects of wealth redistribution from rich to poor households on consumption and output in the short run. We first demonstrate analytically how the direction and size of the output effects of such interventions depend on labor supply decisions. We then show that in a standard incomplete-markets model extended to allow for nominal rigidities and parametrized to match the U.S. wealth distribution, wealth redistribution does lead to a temporary boom in consumption but a far smaller increase in output. Our results suggest substantial value in empirical research uncovering the distribution of marginal propensities to work in the population.
- Language
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Englisch
- Bibliographic citation
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Journal: Quantitative Economics ; ISSN: 1759-7331 ; Volume: 8 ; Year: 2017 ; Issue: 3 ; Pages: 761-808 ; New Haven, CT: The Econometric Society
- Classification
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Wirtschaft
Micro-Based Behavioral Economics: General‡
Macroeconomics: Consumption; Saving; Wealth
Aggregate Factor Income Distribution
Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
- Subject
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Multipliers
redistribution
labor supply
idiosyncratic risk
- Event
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Geistige Schöpfung
- (who)
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Athreya, Kartik B.
Owens, Andrew
Schwartzman, Felipe Farah
- Event
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Veröffentlichung
- (who)
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The Econometric Society
- (where)
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New Haven, CT
- (when)
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2017
- DOI
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doi:10.3982/QE578
- Handle
- Last update
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10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Athreya, Kartik B.
- Owens, Andrew
- Schwartzman, Felipe Farah
- The Econometric Society
Time of origin
- 2017
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Early Warning System To Increase Supply Chain Resilience
Energy supply shocks' nonlinearities on output and prices
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