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Optimal redistribution when different workers are indistinguishable

Marchand, Maurice; Pestieau, Pierre; Racionero, Maria


Using the standard non linear income and commodity taxation framework, we examine the optimal policy to be adopted when the same labour disutility can receive two opposite interpretations: taste for leisure and activity limitation. In the absence of complete information about individual characteristics, an income tax does not allow distinguishing lazy from handicapped individuals. One may rely, however, on a combination of commodity and income taxes to redistribute from the former to the latter...[Show more]

CollectionsANU Research Publications
Date published: 2003
Type: Journal article
Source: Canadian Journal of Economics
DOI: 10.1111/1540-5982.t01-3-00006


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