Details
| Original language | English |
|---|---|
| Pages (from-to) | 622-629 |
| Number of pages | 8 |
| Journal | Jahrbucher fur Nationalokonomie und Statistik |
| Volume | 225 |
| Issue number | 6 |
| Publication status | E-pub ahead of print - 20 Sept 2016 |
Abstract
Effective from 2005, benefits for long-term unemployed have been reduced in Germany to the level of social assistance. This measure reflects the view that "all who are able to work, should work" - a view which makes sense only if the government can distinguish the disabled from the productive. In this paper we augment the standard model of optimal taxation, where the government has no information about individual productivities, by this very assumption: Partial information means that the government can distinguish the disabled from the productive, but cannot distinguish among the different productive types. An interesting proposition about the shape of optimal tax-transfer schemes under partial information is derived. Moreover, it is shown that unemployment on the side of the productive poor may still be optimal.
Keywords
- Employment, Optimal taxation, Poverty, Welfare
ASJC Scopus subject areas
- Business, Management and Accounting(all)
- Social Sciences(all)
- Social Sciences (miscellaneous)
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
Sustainable Development Goals
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In: Jahrbucher fur Nationalokonomie und Statistik, Vol. 225, No. 6, 20.09.2016, p. 622-629.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Optimal taxes and transfers under partial information
AU - Homburg, Stefan
AU - Lohse, Tim
PY - 2016/9/20
Y1 - 2016/9/20
N2 - Effective from 2005, benefits for long-term unemployed have been reduced in Germany to the level of social assistance. This measure reflects the view that "all who are able to work, should work" - a view which makes sense only if the government can distinguish the disabled from the productive. In this paper we augment the standard model of optimal taxation, where the government has no information about individual productivities, by this very assumption: Partial information means that the government can distinguish the disabled from the productive, but cannot distinguish among the different productive types. An interesting proposition about the shape of optimal tax-transfer schemes under partial information is derived. Moreover, it is shown that unemployment on the side of the productive poor may still be optimal.
AB - Effective from 2005, benefits for long-term unemployed have been reduced in Germany to the level of social assistance. This measure reflects the view that "all who are able to work, should work" - a view which makes sense only if the government can distinguish the disabled from the productive. In this paper we augment the standard model of optimal taxation, where the government has no information about individual productivities, by this very assumption: Partial information means that the government can distinguish the disabled from the productive, but cannot distinguish among the different productive types. An interesting proposition about the shape of optimal tax-transfer schemes under partial information is derived. Moreover, it is shown that unemployment on the side of the productive poor may still be optimal.
KW - Employment
KW - Optimal taxation
KW - Poverty
KW - Welfare
UR - http://www.scopus.com/inward/record.url?scp=29144438479&partnerID=8YFLogxK
U2 - 10.1515/jbnst-2005-0604
DO - 10.1515/jbnst-2005-0604
M3 - Article
AN - SCOPUS:29144438479
VL - 225
SP - 622
EP - 629
JO - Jahrbucher fur Nationalokonomie und Statistik
JF - Jahrbucher fur Nationalokonomie und Statistik
SN - 0021-4027
IS - 6
ER -