Income redistribution

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

This chapter examines the question of income redistribution and the 'second-best' context in which redistribution is constrained by the fact that only (gross and net) income is observable, so that public authorities cannot distinguish between people working hard with low skill and people working little with a high wage rate. As one would like to redistribute from high-skilled individuals to low-skilled individuals, more or less independently of their preferences over leisure, failure to distinguish between them is a direct obstacle to achieving fairness. The chapter first considers allocation rules and social orderings, along with social ordering functions and fair income tax. It then turns to a discussion of unearned income as well as the correlation between skills and quality of life and between education and skills.

Original languageEnglish (US)
Title of host publicationFairness, Responsibility, and Welfare
PublisherOxford University Press
ISBN (Electronic)9780191808579
ISBN (Print)9780199215911
DOIs
StatePublished - Apr 30 2015
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)

Keywords

  • Allocation rules
  • Education
  • Fair income tax
  • Fairness
  • Income redistribution
  • Leisure
  • Quality of life
  • Skills
  • Social orderings
  • Unearned income

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