In this paper we develop a dynamic structural life-cycle model of labor supply behavior which fully accounts for the effect of income tax and transfers on labor supply incentives. Additionally, the model recognizes the demand side driven rationing risk that might prevent individuals from...

Using a standard dynamic general equilibrium model, we show that the interaction of staggered nominal contracts with hyperbolic discounting leads to inflation having significant long-run effects on real variables...

This paper contributes to the debate about the optimal design of tax-transfer systems. Basedon the theory of optimal taxation, combined with microsimulation and microeconometrictechniques we derive the welfare function which makes the current German tax and transfersystem for single women optimal...

This paper analyses theoretically and empirically how employment subsidies should betargeted. We contrast measures involving targeting workers with low incomes/abilities andtargeting the unemployed under the criteria of "approximate welfare efficiency" (AWE)...

This paper extends previous research about the determinants of reservation wages byanalysing the effect of progressive income taxation on the ratio between reservation and netmarket wages...