Arbeitspapier
Optimal Income Taxation with Unemployment and Wage Responses: A Sufficient Statistics Approach
We derive a sufficient statistics optimal income tax formula in a general model that incorporates unemployment and endogenous wages, to study the shape of the tax and transfer system at the bottom of the income distribution. The sufficient statistics are the macro employment response to taxation and the micro and macro participation responses. We estimate these statistics using policy variation from the U.S. tax and transfer system. Our results suggest that the optimal tax more closely resembles a Negative Income Tax than an Earned Income Tax Credit relative to the case where unemployment and wage responses are not taken into account.
- Language
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Englisch
- Bibliographic citation
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Series: CESifo Working Paper ; No. 6686
- Classification
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Wirtschaft
- Event
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Geistige Schöpfung
- (who)
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Kroft, Kory
Kucko, Kavan
Lehmann, Etienne
Schmieder, Johannes Friedrich
- Event
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Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
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Munich
- (when)
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2017
- Handle
- Last update
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10.03.2025, 11:43 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the 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
- Arbeitspapier
Associated
- Kroft, Kory
- Kucko, Kavan
- Lehmann, Etienne
- Schmieder, Johannes Friedrich
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2017
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