TY - JOUR
T1 - Taxes, transfers and employment in an incomplete markets model
AU - Alonso-Ortiz, Jorge
AU - Rogerson, Richard
N1 - Funding Information:
We thank Chris Sleet and an anonymous referee for valuable comments, plus conference participants at the CEPR conference held in Budapest in October 2008, the 2009 SED Meetings, and seminar participants at Yonsei University. Rogerson thanks the NSF as well as the Korean Science Foundation (WCU-R33-10005) for financial support.
PY - 2010/11
Y1 - 2010/11
N2 - The consequences of increases in the scale of tax and transfer programs are assessed in the context of a model with idiosyncratic productivity shocks and incomplete markets. The effects are contrasted with those obtained in a stand-in household model featuring no idiosyncratic shocks and complete markets. The main finding is that the impact on hours remains very large, but the welfare consequences are very different. The analysis also suggests that tax and transfer policies have large effects on average labor productivity via selection effects on employment.
AB - The consequences of increases in the scale of tax and transfer programs are assessed in the context of a model with idiosyncratic productivity shocks and incomplete markets. The effects are contrasted with those obtained in a stand-in household model featuring no idiosyncratic shocks and complete markets. The main finding is that the impact on hours remains very large, but the welfare consequences are very different. The analysis also suggests that tax and transfer policies have large effects on average labor productivity via selection effects on employment.
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U2 - 10.1016/j.jmoneco.2010.08.008
DO - 10.1016/j.jmoneco.2010.08.008
M3 - Article
AN - SCOPUS:78649892077
SN - 0304-3932
VL - 57
SP - 949
EP - 958
JO - Journal of Monetary Economics
JF - Journal of Monetary Economics
IS - 8
ER -