Social Insurance and Redistribution

Robin Boadway (), Manuel Leite-Monteiro (), Maurice Marchand and Pierre Pestieau ()
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Maurice Marchand: CORE, Universit´e catholique de Louvain

No 1004, Working Papers from Queen's University, Department of Economics

Abstract: This paper studies optimal linear income taxation and redistributive social insurance when the former has the traditional labor distortion and the latter generates both ex ante and ex post moral hazard. Private insurance is available and individuals differ in labor productivity and in loss probability. We show that government intervention in insurance markets is welfare-improving, and social insurance is generally desirable when there is a negative correlation between labor productivity and loss probability.

Keywords: Social Insurance; Moral Hazard; Redistribution (search for similar items in EconPapers)
JEL-codes: H23 H51 (search for similar items in EconPapers)
Date: 2002-04
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http://www.econ.queensu.ca/working_papers/papers/qed_wp_1004.pdf First version 2002 (application/pdf)

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Working Paper: Social insurance and redistribution (2001)
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Persistent link: http://EconPapers.repec.org/RePEc:qed:wpaper:1004

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