Optimal income taxation and social norms in the Labor market
2010 (English)In: International Tax and Public Finance, ISSN 0927-5940, E-ISSN 1573-6970, Vol. 17, no 1, 67-89 p.Article in journal (Refereed) Published
This paper concerns optimal income taxation in a two-type model extended to allow for social interaction and social norms in the labor market. One norm refers to “normal behavior” with respect to work hours (the hours of work norm), whereas another means that “one should earn one’s living by working” (the participation norm). The results show how the hours of work norm gives rise to a corrective motive for using income taxation. We also show how the interaction between the hours of work norm and the private incentive to participate in the labor market (which reflects the participation norm) gives rise to an employment motive for using the income tax.
Place, publisher, year, edition, pages
Springer , 2010. Vol. 17, no 1, 67-89 p.
Optimal taxation, Redistribution, Social interaction, Norms
Research subject Economics
IdentifiersURN: urn:nbn:se:umu:diva-26816DOI: 10.1007/s10797-008-9100-1ISI: 000274332000006OAI: oai:DiVA.org:umu-26816DiVA: diva2:274226