Tagging with leisure needs

Pierre Pestieau and Maria Racionero

No 2010041, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: We study optimal redistributive taxes when individuals differ in two characteristics - earning ability and leisure needs - assumed to be imperfectly correlated. Individuals have private information about their abilities but needs are observable. With two different levels of observable needs the population can be separated into two groups and needs may be used as a tag. We first assume that the social planner considers individuals should be compensated for their leisure needs and characterize the optimal redistributive policy, and the extent of compensation for needs, with tagging. We also consider an alternative social objective in which individuals are deemed responsible for their needs.

Keywords: optimal non-linear taxation; quasi-linear preferences; tagging needs; responsibility (search for similar items in EconPapers)
JEL-codes: H21 H41 (search for similar items in EconPapers)
Date: 2010-07-01
New Economics Papers: this item is included in nep-cta
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Related works:
Journal Article: Tagging with leisure needs (2015)
Working Paper: Tagging with Leisure Needs (2015)
Working Paper: Tagging with leisure needs (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2010041

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