Monitoring and Optimal Income Taxation with Involuntary Unemployment

Boadway,; Cuff,

doi:10.15609/annaeconstat2009.113-114.121

Cited by 3 publications

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“…We have assumed that the government can observe who is involuntarily unemployed so that workers cannot refuse employment or quit jobs to take advantage of unemployment insurance. If such behavior was unobservable then some form of monitoring as shown in Boadway and Cuff (, ) would be needed. We have also assumed that workers direct their search only to labor markets catering to their skills.…”

Section: Resultsmentioning

confidence: 99%

Optimal unemployment insurance and redistribution

Boadway

Cuff

2018

J Public Economic Theory

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe characterize optimal income taxation and unemployment insurance in a search-matching framework where both voluntary and involuntary unemployment are endogenous and Nash bargaining determines wages. Individuals differ in utility when voluntarily unemployed (non-participants in the labour market) and decide whether to participate as a job seeker and if so, how much search effort to exert. Unemployment insurance trades off insurance versus moral hazard due to search. We show that it is optimal to have a positive linear wage tax without any redistributive concerns even if search is efficient so the Hosios condition is satisfied. We also allow for different productivity types so there is a redistributive role for the income tax and show that a proportional wage tax internalizes the macro effects arising from endogenous wages. Lump-sum income taxes and transfers can then redistribute between individuals of differing skills and employment states. Our analysis embeds optimal unemployment insurance into an extensive-margin optimal redistribution framework where transfers to the involuntary and voluntary unemployed can differ, and nests several standard models in the literature.

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Section: Resultsmentioning

confidence: 99%

Optimal unemployment insurance and redistribution

Boadway

Cuff

2018

J Public Economic Theory

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“…However, it should be recognized that this generic probability function could be interpreted in several meaningful ways. For example, it could be microfounded by adapting the matching framework developed in Boadway & Cu↵ (2014). Other interpretations, reflecting the institutional features of the education system or that of the labor market could also be put forward.…”

Section: Modelmentioning

confidence: 99%

Uncovering Gatsby Curves

St-Amant

Garon

Marceau

2022

Preprint

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Empirical findings suggest a positive correlation between inequality and social immobility, a phenomenon coined the (Great) Gatsby curve. However, complete explanations of the phenomenon have not yet been proposed. This paper answers two questions: What are Gatsby curves? When do they exist? We build a theoretical environment in which parental investment and education improve the economic prospects of children. Gatsbian economies and Gatsby curves are formally defined, and we characterize the conditions under which they arise. We show that an economy may go from being Gatsbian to non-Gatsbian, and vice versa. JEL Codes: D31, H52, J31, J62

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“…However, it should be recognized that this generic probability function could be interpreted in several meaningful ways. For example, it could be microfounded by adapting the matching framework developed in Boadway & Cuff (2014). Other interpretations, reflecting the institutional features of the education system or that of the labor market could also be put forward.…”

Section: Modelmentioning

confidence: 99%

Uncovering Gatsby Curves

2020

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Empirical findings suggest a positive correlation between inequality and social immobility, a phenomenon coined the Gatsby curve. However, complete explanations of the phenomenon have not yet been proposed. This paper answers two questions: What are Gatsby curves? When do they exist? We build a theoretical environment in which parental investment and education improve the economic prospects of children. Gatsbian economies and Gatsby curves are formally defined, and we characterize the conditions under which they will arise. We show that an economy may go from being Gatsbian to non-Gatsbian. Finally, we show that the better network of relations of those with high-paying jobs may also generate a Gatsbian economy.

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Monitoring and Optimal Income Taxation with Involuntary Unemployment

Cited by 3 publications

References 0 publications

Optimal unemployment insurance and redistribution

Optimal unemployment insurance and redistribution

Uncovering Gatsby Curves

Uncovering Gatsby Curves

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