380 research outputs found

    A Comparison of Optimal Tax Policies when Compensation or Responsibility Matter

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    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

    A comparison of optimal tax policies when compensation or responsibility matter

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    This paper examines optimal redistribution in a model with high and low-skilled individuals with heterogeneous tastes for labor, that either work or not. With such double heterogeneity, traditional Welfarist criteria including Utilitarianism fail to take the compensation-responsibility trade-off into account. As a response, several other criteria have been proposed in the literature. This paper is the ļ¬rst to 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. The criteria from the social choice literature perform better in this regard than the traditional criteria, both in ļ¬rst 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

    Population Growth and Customary Law on Land: The Case of Cordillera Villages in the Philippines

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    This paper examines how a traditional village deals with the consequences of population growth. The increase in population demands more intensive use of the land which requires the transformation of commonly-owned land into privately-owned land. Customary law contains clear prescriptions about the circumstances under which a couple can privatize land. We estimate this land accumulation rule using date from two villages in the Cordillera Region of the Philippines. In order to study the evolution of the distribution of land, we model the inheritance practices of the community which constitutes another aspect of customary law. Finally, we use the model to show that despite the flexibility of the customary law on land, the present rapid growth of the population given the limited availability of land leads to its breakdown. This could be avoided only if seven out of ten children are able to make a living from occupations other than farming.Population Growth

    Opening Remarks: General Comment No. 2

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    Scrutinizing Countries: The Challenge of Universal Review

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