Optimal skill distribution under convex skill costs

This paper studies optimal distribution of skills in an optimal income tax framework with convex skill constraints. The problem is cast as a social planning problem where a redistributive planner chooses how to distribute a given amount of aggregate skills across people. We find that optimal skill distribution is either perfectly equal or perfectly unequal, but an interior level of skill inequality is never optimal.

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Year of publication:	2018
Authors:	Leung, Tin Cheuk ; Yazici, Hakki
Published in:	Central Bank Review (CBR). - Amsterdam : Elsevier, ISSN 1303-0701. - Vol. 18.2018, 1, p. 29-34
Publisher:	Amsterdam : Elsevier
Subject:	Skill distribution \| Convex skill costs \| Optimal taxation

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Type of publication:	Article
Type of publication (narrower categories):	Article
Language:	English
Other identifiers:	10.1016/j.cbrev.2017.11.003 [DOI] hdl:10419/217313 [Handle] RePEc:tcb:cebare:v:18:y:2018:i:1:p:29-34 [RePEc]
Source:	EconStor

Persistent link: https://www.econbiz.de/10012217563