Please use this identifier to cite or link to this item:
Jacquet, Laurence
van de Gaer, Dirk
Year of Publication: 
Series/Report no.: 
CESifo Working Paper No. 2997
This paper examines optimal redistribution in a model with high- and low-skilled individuals with heterogeneous tastes for labor. We compare the extent to which optimal policies based on different normative criteria obey the principles of compensation (for differential skills) and responsibility (for preferences for labor) when labor supply is along the extensive margin. With heterogeneity in skills and preferences, traditional Welfarist criteria including Utilitarianism present unappealing policy recommendations in some scenarios as they fail to take compensation and responsibility issues into account. Criteria from the social choice literature perform better in this regard in first-and second-best. More importantly, these equality of opportunity criteria push the second-best policy away from an Earned Income Tax Credit and in the direction of a Negative Income Tax.
optimal income taxation
equality of opportunity
heterogeneous preferences for labor
Document Type: 
Working Paper

Files in This Item:
532.39 kB

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.