The redistribution of trade gains and the equity-efficiency trade-off

Arbeitspapier

The contribution of this paper is to derive an optimal redistribution scheme for trade gains in the case of a government's objective function that explicitly accounts for the equity-efficiency trade-off. The government pays unemployment benefits (UB) either financed by a wage tax, a payroll tax or a profit tax paid by exporters only. Using a Melitz-type framework with unionized labor markets and heterogeneous workers we show that there is a clear-cut ranking of the redistribution schemes in terms of welfare level: 1. UB financed by a profit tax paid by exporters, 2. UB financed by a wage tax, 3. UB financed by a payroll tax.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IAAEU Discussion Paper Series in Economics ; No. 06/2012

Classification and Topics

• Classification: Wirtschaft ; Trade and Labor Market Interactions
• Subject: trade liberalization ; heterogeneous firms ; trade unions ; income inequality ; unemployment benefits ; taxes ; Handelsliberalisierung ; Außenhandelsgewinn ; Arbeitslosenversicherung ; Einkommensumverteilung ; Ertragsbesteuerung ; Exportwirtschaft ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): de Pinto, Marco
• Event: Veröffentlichung
• (who): University of Trier, Institute for Labour Law and Industrial Relations in the European Union (IAAEU)
• (where): Trier
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/80867
• Last update: 10.03.2025, 11:43 AM CET