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on Public Finance |
| By: | Jean-Baptiste Michau (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X) |
| Abstract: | While the participation decision is discrete in a static context, i.e. to work or not to work, such is not the case in a life-cycle context where workers choose the fraction of their lifetime that they spend working. In this paper, I therefore characterize the optimal redistribution policy in a life-cycle framework with both an intensive and an extensive margin of labor supply. The government should optimally design a history-dependent social security system which induces higher productivity individuals to retire later. Some redistribution therefore needs to be done through the pension system; a standard non-linear income tax is not enough. |
| Keywords: | Extensive margin, Optimal redistribution, Retirement age, Social security |
| Date: | 2011–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00639121&r=pub |
| By: | Martin Ljunge (University of Copenhagen and SITE) |
| Abstract: | I estimate a price elasticity of sickness absence. Sick leave is an intensive margin of labor supply where individuals are free to adjust. I exploit variation in tax rates over two decades, which provide thousands of differential incentives across time and space, to estimate the price responsiveness. High taxes provide an incentive to take more sick leave, as less after tax income is lost when taxes are high. The panel data, which is representative of the Swedish population, allow for extensive controls including unobserved individual characteristics. I find a substantial price elasticity of sick leave, -0.7, with respect to the net of tax rate. Though large relative to traditional labor supply elasticities, Swedes are half as price elastic as bike messengers, and just as elastic as stadium vendors on the margin which they can adjust freely. |
| Keywords: | sick leave, adjustable labor supply, work effort, taxes |
| JEL: | H31 I31 J22 |
| Date: | 2011–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:1127&r=pub |
| By: | Martin Ljunge (Department of Economics, University of Copenhagen) |
| Abstract: | Theory predicts that unit taxes increase the quality consumed in a market since unit taxes reduce the relative price of high quality goods. Ad valorem taxes, on the other hand, have no effect on relative prices and should not affect product quality. The hypothesis is tested empirically in the US wine market. I find that the market share of high quality wine is significantly increased by unit taxes and that there is no significant effect of ad valorem taxes, in accordance with the hypothesis and previous empirical studies. |
| Keywords: | Quality Choice; Unit Tax; Tax Distortion |
| JEL: | D12 H31 |
| Date: | 2011–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:1128&r=pub |