Optimal redistribution with unobservable disability: welfarist versus non-welfarist social objectives

Pierre Pestieau and Maria Racionero

No 2007035, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: This paper examines the optimal non linear income and commodity tax when the same labor disutility can receive two alternative interpretations, taste for leisure and disability, but the disability is not readily observable. We compare the optimal policyunder alternative social objectives, welfarist and non-welfarist, and conclude that the non-welfarist objective, in which the planner gives a higher weight to the disutility of labour of the disabled individuals, is the only reasonable specification. It has some foundation in the theory of responsability; further, unlike the other specifications it yields an optimal solution that may involve a lower labour supply requirement from disabled individuals.

Keywords: optimal non-linear taxation; quasi-linear preferences; asymmetric information; responsibility (search for similar items in EconPapers)
JEL-codes: H21 H41 (search for similar items in EconPapers)
Date: 2007-05-01
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://sites.uclouvain.be/core/publications/coredp/coredp2007.html (application/pdf)

Related works:
Journal Article: Optimal redistribution with unobservable disability: Welfarist versus non-welfarist social objectives (2009)
Working Paper: Optimal redistribution with unobservable disability: welfarist versus non-welfarist social objectives (2009)
Working Paper: Optimal redistribution with unobservable disability: Welfarist versus non-welfarist social objectives (2009)
Working Paper: Optimal redistribution with unobservable disability: Welfarist versus non-welfarist social objectives (2009)
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:cor:louvco:2007035

Access Statistics for this paper

More papers in LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC.
Bibliographic data for series maintained by Alain GILLIS ().