Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/102095
Authors: 
Bastani, Spencer
Blumkin, Tomer
Micheletto, Luca
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 4938
Abstract: 
In this paper we allude to a novel role played by the non-linear income tax system in the presence of adverse selection in the labor market due to asymmetric information between workers and firms. We show that an appropriate choice of the tax schedule enables the government to affect the wage distribution by controlling the transmission of information in the labor market. This represents an additional channel through which the government can foster the pursuit of its redistributive goals.
Subjects: 
adverse selection
labor market
optimal taxation
pooling
redistribution
JEL: 
D82
H21
J31
Document Type: 
Working Paper

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