Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/57292 
Year of Publication: 
2012
Series/Report no.: 
CESifo Working Paper No. 3781
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This study investigates whether excess effort to climb a career ladder justifies policy interventions. The answer depends on whether the government is able to levy a higher tax burden on career workers than on non-career workers. Both a tax on top income aimed at lowering the rewards of promotion and a labour law that restricts excess effort require such a differentiation in the tax burden to improve welfare. The differentiation in tax burden prevents that the welfare gain of reducing excess effort is neutralized by the welfare cost connected to an increase in the number of career workers.
Subjects: 
tournaments
promotions
status
taxation
JEL: 
H21
H23
L22
J33
Document Type: 
Working Paper
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