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We test the hypothesis that the flypaper effect can arise if the recipient government finances part of its expenditures with a distortionary tax. We present a simple theoretical framework that shows how a lump-sum transfer stimulates the marginal expenditures of a recipient government through an...
Persistent link: https://www.econbiz.de/10010555694
Although decision processes at the EU level are highly complex and often require unanimity, explicit side payments among member states are unknown. However, logrolling and redistributive policies are substitutes. This paper considers the EU regional policy as a substitute for explicit side...
Persistent link: https://www.econbiz.de/10005765988
This paper shows how a popular system of federal revenue equalization grants can limit tax competition among subnational governments, correct fiscal externalities, and increase government spending. Remarkably, an equalization grant can implement efficient policy choices by regional governments,...
Persistent link: https://www.econbiz.de/10005181399
This paper presents the properties of optimal piecewise linear tax systems for two-earner households, based on joint and individual incomes respectively. A key contribution is the analysis of the interaction between second earner wage differences, variation in the price of child care and...
Persistent link: https://www.econbiz.de/10010877775
We estimate and decompose family income-related inequality in child health in the US and analyze its dynamics using the … income-related child health inequality remains stable from early childhood into adolescence. The main factor underlying … income-related child health inequality is family income itself, although other factors, such as maternal education, also play …
Persistent link: https://www.econbiz.de/10009294101
by the Ramsey government not only increases aggregate efficiency, but it also decreases inequality. This result is in …
Persistent link: https://www.econbiz.de/10010556462
This paper examines the measurement of social welfare, poverty and inequality taking into account reference … differences between standard poverty and inequality measures based on observed income and measures that are calculated based on …
Persistent link: https://www.econbiz.de/10010607471
We examine the determinants of income mobility and inequality in a Ramsey model with elastic labor supply and … relationship between mobility and inequality is complex. For example, a reduction in the interest rate and an increase in the wage … rate reduce capital income inequality and allow upward mobility of the ability-rich. However, the increase in the labor …
Persistent link: https://www.econbiz.de/10010732346
save dynastically and middle income households who save for retirement. We find that inequality is reduced the higher the … efficiency and inequality: middle income households’ consumption is maximal at a higher capital tax rate than high income …
Persistent link: https://www.econbiz.de/10010754656
tracking increases educational inequality. While less clear, there is also a tendency for early tracking to reduce mean …
Persistent link: https://www.econbiz.de/10005765754