Optimal wage redistribution in the presence of adverse selection in the labor market
Spencer Bastani,
Tomer Blumkin and
Luca Micheletto
Journal of Public Economics, 2015, vol. 131, issue C, 41-57
Abstract:
In this paper we highlight a novel role played by the non-linear income tax in the presence of adverse selection in the labor market due to asymmetric information between workers and firms. Relying on the Rothschild and Stiglitz equilibrium concept, we show that an appropriate choice of the tax schedule enables the government to affect the wage distribution by controlling the transmission of information in the labor market. This represents an additional channel through which the government can foster the pursuit of its redistributive goals.
Keywords: Adverse selection; Labor market; Optimal taxation; Pooling; Redistribution (search for similar items in EconPapers)
JEL-codes: D82 H21 J31 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0047272715001401
Full text for ScienceDirect subscribers only
Related works:
Working Paper: Optimal Wage Redistribution in the Presence of Adverse Selection in the Labor Market (2015) 
Working Paper: Optimal Wage Redistribution in the Presence of Adverse Selection in the Labor Market (2015) 
Working Paper: Optimal Wage Redistribution in the Presence of Adverse Selection in the Labor Market (2015) 
Working Paper: Optimal Wage Redistribution in the Presence of Adverse Selection in the Labor Market (2014) 
Working Paper: Optimal Wage Redistribution in the Presence of Adverse Selection in the Labor Market (2014) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:131:y:2015:i:c:p:41-57
DOI: 10.1016/j.jpubeco.2015.08.005
Access Statistics for this article
Journal of Public Economics is currently edited by R. Boadway and J. Poterba
More articles in Journal of Public Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().