Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/184800
Authors: 
Cogliano, Jonathan F.
Veneziani, Roberto
Yoshihara, Naoki
Year of Publication: 
2018
Series/Report no.: 
Working Paper 849
Abstract: 
This paper uses a computational framework to analyse the equilibrium dynamics of exploitation and inequality in accumulation economies with heterogeneous labour. A novel index is presented which measures the intensity of exploitation at the individual level and the dynamics of the distribution of exploitation intensity is analysed. The effects of technical change and evolving social norms on exploitation and inequalities are also considered and an interesting phenomenon of exploitation cycles is identified. Various taxation schemes are analysed which may reduce exploitation or inequalities in income and wealth. It is shown that relatively small taxation rates may have significant cumulative effects on wealth and income inequalities. Further, taxation schemes that eliminate exploitation also reduce disparities in income and wealth but in the presence of heterogeneous skills, do not necessarily eliminate them. The inegalitarian effects of different abilities need to be tackled with a progressive education policy that compensates for unfavourable circumstances.
Subjects: 
Exploitation
heterogeneous labour
wealth taxes
computational methods
JEL: 
B51
C63
D31
Document Type: 
Working Paper
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