Good Jobs, Bad Jobs and Redistribution

Kjell Lommerud () and Bjørn Sandvik ()
Authors registered in the RePEc Author Service: Odd Rune Straume

No 4115, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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.

Keywords: Rent sharing; Segmented labour markets; Optimal taxation; Redistribution (search for similar items in EconPapers)
JEL-codes: H20 J42 J51 (search for similar items in EconPapers)
Date: 2003-11
New Economics Papers: this item is included in nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Good Jobs, Bad Jobs and Redistribution* (2004)
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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