Hungerbühler, Mathias; Lehmann, Etienne; Parmentier, Alexis - 2010
, agents are endowed with different skill levels and labor markets are perfectly segmented by skill. The government only … observes negotiated wages. More progressive taxation leads to wage moderation that boosts labor demand. We design the optimal … nonlinear redistributive tax schedule in the absence of welfare benefits and extensive labor supply margin. Compared to their …