On the Effects of Redistribution on Growth and Entrepreneurial Risk-Taking

Maik Heinemann and Christiane Clemens

No 275, Computing in Economics and Finance 2005 from Society for Computational Economics

Abstract: This paper investigates the redistributive effects of taxation on occupational choice and growth. We discuss a two-sector economy in the spirit of Romer (1990). Agents engage in one of two alternative occupations: either self-employment in an intermediate goods sector characterized by monopolistic competition, or employment as ordinary worker in this sector. Entrepreneurial profits are stochastic. The occupational choice under risk endogenizes the number of firms in the intermediate goods industry. While the presence of entrepreneurial risk results in a suboptimally low number of firms and depresses growth, nonlinear tax schemes are capable of compensating the negative byeffects by ex post providing a social insurance

Keywords: OLG; endogenous growth; entrepreneurship; occupational choice; redistributive taxation (search for similar items in EconPapers)
JEL-codes: D3 E6 J24 O4 (search for similar items in EconPapers)
Date: 2005-11-11
References: Add references at CitEc
Citations: View citations in EconPapers (2)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: On the Effects of Redistribution on Growth and Entrepreneurial Risk-taking (2006)
Working Paper: On the Effects of Redistribution on Growth and Entrepreneurial Risk-Taking (2005)
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:sce:scecf5:275

Access Statistics for this paper

More papers in Computing in Economics and Finance 2005 from Society for Computational Economics Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F. Baum ().