Article ID Journal Published Year Pages File Type
7396072 Central Bank Review 2018 6 Pages PDF
Abstract
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.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics, Econometrics and Finance (General)
Authors
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