Optimal Linear Taxation under Endogenous Longevity

Marie-Louise Leroux, Pierre Pestieau and Gregory Ponthiere

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Abstract: This paper studies the optimal linear tax-transfer policy in an economy where agents differ in productivity and in genetic background and where longevity depends on health spending and genes. If agents internalize imperfectly the impact of health spending on longevity, the utilitarian optimum can be decentralized with type-specific lump-sum transfers and Pigouvian taxes correcting for agents' myopia and for their misperception of health spending's effects on the economy's resources. The second-best problem is examined under linear taxation instruments. It may be optimal to tax health spending, especially under complementarity of genes and health spending in the production of longevity.

Keywords: Longevity; Myopia; Taxation (search for similar items in EconPapers)
Date: 2011-01
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Citations: View citations in EconPapers (12)

Published in Journal of Population Economics, 2011, 24 (1), pp.213-237. ⟨10.1007/s00148-010-0304-1⟩

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Related works:
Journal Article: Optimal linear taxation under endogenous longevity (2011)
Working Paper: Optimal linear taxation under endogenous longevity (2011)
Working Paper: Optimal Linear Taxation under Endogenous Longevity (2011)
Working Paper: Optimal linear taxation under endogenous longevity (2008)
Working Paper: Optimal linear taxation under endogenous longevity (2008)
Working Paper: Optimal linear taxation under endogenous longevity (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00754569

DOI: 10.1007/s00148-010-0304-1

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