English, Article, Journal or magazine article edition: Is it fair to “make work pay”? R. I. LUTTENS; E. OOGHE

User activity

Share to:
 
Bookmark: http://trove.nla.gov.au/version/15271
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Is it fair to “make work pay”?
Author
  • R. I. LUTTENS
  • E. OOGHE
Physical Description
  • preprint
Notes
  • The design of the income transfer program for the lower incomes is a hot issue in current public policy debate. Should we stick to a generous welfare state with a sizeable basic income, but high marginal tax rates for the lower incomes and thus little incentives to work? Or, should we “make work pay” by subsidizing the work of low earners, but possibly at the cost of a smaller safety net? We think it is difficult to answer this question without making clear what individuals are (held) responsible for and what not. First, we present a new fair allocation, coined a Pareto Efficient and Shared resources Equivalent allocation (PESE), which compensates for different productive skills, but not for different tastes for working.We also characterize a fair social ordering, which rationalizes the PESE allocation. Second, we illustrate the optimal second-best allocation in a discrete Stiglitz (1982, 1987) economy. The question whether we should have regressive or progressive taxes for the low earners crucially depends on whether the low-skilled have a strictly positive or zero skill. Third, we simulate fair taxes for a sample of Belgian singles. Our simulation results suggest that “making work pay” policies can be optimal, according to our fairness criterion, but only in the unreasonable case in which most of the unemployed are not willing to work.
  • make work pay, optimal income taxation, fairness
  • RePEc:rug:rugwps:05/​283
Language
  • English
Contributed by
OAIster

Get this edition

Other links

  • Set up My libraries

    How do I set up "My libraries"?

    In order to set up a list of libraries that you have access to, you must first login or sign up. Then set up a personal list of libraries from your profile page by clicking on your user name at the top right of any screen.

  • All (1)
  • Unknown (1)
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.

User activity


e.g. test cricket, Perth (WA), "Parkes, Henry"

Separate different tags with a comma. To include a comma in your tag, surround the tag with double quotes.

Be the first to add a tag for this edition

Be the first to add this to a list

Comments and reviews

What are comments? Add a comment

No user comments or reviews for this version

Add a comment