@techreport{Cremer2008Habit,
abstract = {This paper shows that the combination of habit formation - present consumption creating additional consumption needs in the future - and myopia may explain why some retirees are forced to unretire, i.e., unexpectedly return to work. It also shows that when myopia about habit formation leads to unretirement there is a case for government's intervention. In a first-best setting the optimal solution can be decentralized by a simple Pigouvian (paternalistic) consumption tax (along with suitable lump-sum taxes). In a second-best setting, when personalized lump-sum transfers are not available, consumption taxes may have conflicting paternalistic and redistributive effects. We study the design of consumption taxes in such a setting when myopic individuals differ in productivity.},
address = {M\"{u}nchen},
author = {Helmuth Cremer and Philippe de Donder and Dar\'{\i}o Maldonado and Pierre Pestieau},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {D91; H21; H55; 330; Habit formation; myopia; unretiring; Einkommenshypothese; Konsum; Risiko; Altersgrenze; Arbeitsangebot; Verbrauchsteuer; Theorie},
language = {eng},
number = {2351},
publisher = {CESifo},
title = {Habit formation and labor supply},
type = {CESifo working paper},
url = {http://hdl.handle.net/10419/26396},
year = {2008}
}
