Pareto Weights in Practice: A Quantitative Analysis Across 32 OECD Countries

Bo Hyun Chang, Yongsung Chang and Sun-Bin Kim
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Bo Hyun Chang: University of Rochester

No 2016rwp-92, Working papers from Yonsei University, Yonsei Economics Research Institute

Abstract: We develop a quantitative heterogeneous-agents general equilibrium model that reproduces the income inequalities of 32 countries in the Organization for Economic Co-operation and Development. Using this model, we compute the optimal income tax progressivity and redistribution for each country under the equal-weight utili- tarian social welfare function. We simulate the voting outcome for the utilitarian optimal tax reform for each country. Finally, we uncover the Pareto weights in the social welfare functions of each country that justify the current redistribution policy.

Keywords: Income Inequality; Optimal Tax; Pareto Weights; Political Economy; Redistribution (search for similar items in EconPapers)
Pages: 55pages
Date: 2016-10
New Economics Papers: this item is included in nep-dge and nep-pbe
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Citations: View citations in EconPapers (7)

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Working Paper: Pareto Weights in Practice: A Quantitative Analysis Across 32 OECD Countries (2017)
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