A Road Map for Efficiently Taxing Heterogeneous Agents
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Citations
Macroeconomics and Household Heterogeneity
Health, health insurance, and retirement: a survey
The effects of collecting income taxes on Social Security benefits
Greater Inequality and Household Borrowing: New Evidence from Household Data
Effects of COVID-19 Early Release of Pension Funds. The Case of Chile
References
The Promise of Positive Optimal Taxation: Normative Diversity and a Role for Equal Sacrifice
Taxing women: A macroeconomic analysis
Labor-dependent capital income taxation
Related Papers (5)
Consumption Insurance Against Wage Risk: Family Labor Supply and Optimal Progressive Income Taxation
Frequently Asked Questions (4)
Q2. What is the tax function for a household with no earners?
If the tax function is a second-degree polynomial then the tax distortion also increases but a smaller rate for older households.
Q3. What is the effect of the benchmark model on labor supply elasticity?
1In the benchmark model the (heterogeneity in) labor supply elasticity depends mostly on the distribution of reservation wages and not on the value θ (see Hansen (1985), Rogerson (1988), and Chang and Kim (2006)).
Q4. What is the value function for a household with no earners?
The value function for a household employing the female worker is:V {NE,E} zj (a,x,κ,E−1) = maxc,a′,hf{ log(c) + ψmj (1− hm)1−θ1− θ + ψfj(1− hf )1−θ1− θ − ζ(Ef−1)+βsj+1 ∑ xm′ ∑ xf ′ Γxmx′mΓxfx′f ∗[ (1− λm) 1− p ∑s={2,3}psV 1z(j+1)(a ′,x′,κs,E) +λm 1− p ∑s={2,3}psV {NE,NE} z(j+1) (a ′,x′,κs,E)] (1)s.t. hf = 0 (2)(1+τc)c+a ′ = (1−τss)W −TL(W ; S)+(1+r(1−τk))(a+Tr) (3)E = {u, e} (4)The value function for a household with no earners is:V {NE,NE} zj (a,x,κ,E−1) = maxc,a′{ log(c) + ψmj (1− hm)1−θ1− θ + ψfj(1− hf )1−θ1− θ+βsj+1 ∑ xm′ ∑ xf ′ Γxmx′mΓxfx′f V 2 z(j+1)(a ′,x′,κ0,E)] (5)s.t. hm = 0, hf = 0 (6)(1+τc)c+a ′ = (1+r(1−τk))(a+Tr) (7)E = {u, u} (8)