Aggregate marginal costs of public funds

John K. Dagsvik () and Steinar Strøm ()
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John K. Dagsvik: Research Department, Statistics Norway, Oslo, Norway

Public Sector Economics, 2022, vol. 46, issue 2, 239-260

Abstract: In this paper, we discuss aggregate measures of marginal costs of public funds (MCF) in populations that are heterogeneous with respect to observed as well as unobserved characteristics. We first discuss how to compute MCF in selected examples of traditional (textbook) labour supply models. Next, we review two types of discrete labour supply models proposed in the literature. Subsequently, we discuss how to calculate aggregate measures of MCF for discrete labour supply models. Finally, we apply an estimated two-sector discrete labour supply model to compute MCF based on Norwegian data.

JEL-codes: C25 H20 H40 H50 J22 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ipf:psejou:v:46:y:2022:i:2:p:239-260

DOI: 10.3326/pse.46.2.3

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