Details
| Originalsprache | Englisch |
|---|---|
| Seiten (von - bis) | 47-58 |
| Seitenumfang | 12 |
| Fachzeitschrift | ECONOMICA |
| Jahrgang | 73 |
| Ausgabenummer | 289 |
| Publikationsstatus | Veröffentlicht - 20 Feb. 2006 |
Abstract
The rational prodigality argument, which often serves to justify social security, is considered in a second-best tax framework with endogenous labour supply. Rational prodigality renders the familiar policies time-inconsistent. I analyse time-consistent policies and show that a wage tax suffices to rule out prodigality as a rational strategy. However, by using savings subsidies the solution can be improved upon. The subsidies are shown to be decreasing in income. A social security system with increasing contributions is not needed in either case.
ASJC Scopus Sachgebiete
- Volkswirtschaftslehre, Ökonometrie und Finanzen (insg.)
- Volkswirtschaftslehre und Ökonometrie
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in: ECONOMICA, Jahrgang 73, Nr. 289, 20.02.2006, S. 47-58.
Publikation: Beitrag in Fachzeitschrift › Artikel › Forschung › Peer-Review
}
TY - JOUR
T1 - Coping with rational prodigals
T2 - A theory of social security and savings subsidies
AU - Homburg, Stefan
PY - 2006/2/20
Y1 - 2006/2/20
N2 - The rational prodigality argument, which often serves to justify social security, is considered in a second-best tax framework with endogenous labour supply. Rational prodigality renders the familiar policies time-inconsistent. I analyse time-consistent policies and show that a wage tax suffices to rule out prodigality as a rational strategy. However, by using savings subsidies the solution can be improved upon. The subsidies are shown to be decreasing in income. A social security system with increasing contributions is not needed in either case.
AB - The rational prodigality argument, which often serves to justify social security, is considered in a second-best tax framework with endogenous labour supply. Rational prodigality renders the familiar policies time-inconsistent. I analyse time-consistent policies and show that a wage tax suffices to rule out prodigality as a rational strategy. However, by using savings subsidies the solution can be improved upon. The subsidies are shown to be decreasing in income. A social security system with increasing contributions is not needed in either case.
UR - http://www.scopus.com/inward/record.url?scp=33646542681&partnerID=8YFLogxK
U2 - 10.1111/j.1468-0335.2006.00447.x
DO - 10.1111/j.1468-0335.2006.00447.x
M3 - Article
AN - SCOPUS:33646542681
VL - 73
SP - 47
EP - 58
JO - ECONOMICA
JF - ECONOMICA
SN - 0013-0427
IS - 289
ER -