Arbeitspapier
Optimal income taxation with endogenous participation and search unemployment
This paper characterizes the optimal redistributive taxation when individuals are heterogeneous in two exogenous dimensions: their skills and their values of non-market activities. Search-matching frictions on the labor markets create unemployment. Wages, labor demand and participation are endogenous. The government only observes wage levels. Under a Maximin objective, if the elasticity of participation decreases along the distribution of skills, at the optimum, the average tax rate is increasing, marginal tax rates are positive everywhere, while wages, unemployment rates and participation rates are distorted downwards compared to their laissez-faire values. A simulation exercise confirms some of these properties under a general utilitarian objective. Taking account of the wage-cum-labor demand margin deeply changes the equity-efficiency trade-off.
- Sprache
-
Englisch
- Erschienen in
-
Series: IZA Discussion Papers ; No. 3804
- Klassifikation
-
Wirtschaft
Asymmetric and Private Information; Mechanism Design
- Thema
-
Non-linear taxation
redistribution
adverse selection
random participation
unemployment
labor market frictions
Optimale Besteuerung
Einkommensteuer
Steuerprogression
Friktionelle Arbeitslosigkeit
Arbeitsangebot
Lohnniveau
Adverse Selection
Arbeitsmarkttheorie
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Lehmann, Etienne
Parmentier, Alexis
van der Linden, Bruno
- Ereignis
-
Veröffentlichung
- (wer)
-
Institute for the Study of Labor (IZA)
- (wo)
-
Bonn
- (wann)
-
2008
- Handle
- URN
-
urn:nbn:de:101:1-20081126795
- Letzte Aktualisierung
-
20.09.2024, 08:23 MESZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Lehmann, Etienne
- Parmentier, Alexis
- van der Linden, Bruno
- Institute for the Study of Labor (IZA)
Entstanden
- 2008