Optimal linear taxation under endogenous longevity
Marie-Louise Leroux,
Pierre Pestieau and
Gregory Ponthiere
PSE Working Papers from HAL
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. It is shown that, if agents internalize imperfectly the impact of genes and health spending on longevity, the utilitarian social optimum can be decentralized with type-specific redistributive lump sum transfers and Pigouvian taxes correcting for agents' myopia (leading to undersaving and underinvestment in health), and for their incapacity to perceive the effect of health spending on the resource constraint of the economy (causing overinvestment in health). The second-best problem is also examined under linear taxation instruments. Our main result is that it may be optimal to tax health spending, in particular under a complementarity of genes and health spending in the production of longevity.
Keywords: longevity; myopia; genetic background; social security; paternalism; longévité; myopie; bagage génétique; sécurité sociale; paternalisme (search for similar items in EconPapers)
Date: 2008-09
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00586241v1
References: View complete reference list from CitEc
Citations: View citations in EconPapers (5)
Downloads: (external link)
https://shs.hal.science/halshs-00586241v1/document (application/pdf)
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 (2011)
Working Paper: Optimal linear taxation under endogenous longevity (2008) 
Working Paper: Optimal linear taxation under endogenous longevity (2008) 
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:hal:psewpa:halshs-00586241
Access Statistics for this paper
More papers in PSE Working Papers from HAL
Bibliographic data for series maintained by CCSD ().