Good Jobs, Bad Jobs and Redistribution*

Kjell Lommerud (), Bjørn Sandvik () and Odd Rune Straume

Scandinavian Journal of Economics, 2004, vol. 106, issue 4, 703-720

Abstract: We analyse the question of optimal taxation in a dual economy, when the policy‐maker is concerned about the distribution of labour income. Income inequality is caused by the presence of sunk capital investments, which creates a “good jobs” sector due to the capture of quasi‐rents by trade unions. With strong unions and high planner preference for income equality, the optimal policy is a combination of investment subsidies and progressive income taxation. If unions are weaker, the policy‐maker may instead choose to tax investment.

Date: 2004
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https://doi.org/10.1111/j.0347-0520.2004.00384.x

Related works:
Working Paper: Good Jobs, Bad Jobs and Redistribution (2003)
Working Paper: Good Jobs, Bad Jobs and Redistribution (2003)
Working Paper: Good jobs, bad jobs and redistribution (2002)
Working Paper: Good jobs, bad jobs and redistribution (2002)
Working Paper: Good Jobs, Bad Jobs and Redistribution (2001)
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