Germany introduced a new mandatory insurance scheme for long-term care in 1995. From a budgetary perspective family care is a cost-saving alternative to formal home care and to stationary nursing care. Thus, one of the goals of the insurance is to support informal care provided by family...

The UK income support system offers a guaranteed income level to single adults available for full time work so long as both earnings and hours worked are below a threshold level. In this paper we examine the effects of this on labour supply. We show that the restriction on hours worked is...

This paper examines an infinite-horizon model of dynamic nonlinear income taxation in which there exists a small probability that the government cannot commit to its future tax policy. In this "loose commitment" environment, we find that even a little uncertainty over whether the government can...

Recent empirical research has found that high-skill individuals tend to be less risk averse than low-skill individuals, which implies that their respective constant relative risk aversion (CRRA) utility functions have different curvature. This paper examines the effects of this form of...

This paper examines a dynamic model of nonlinear income taxation in which the government cannot commit to its future tax policy, and individuals are quasi-hyperbolic discounters who cannot commit to future consumption plans. The government uses its taxation powers to maximise a utilitarian...

This paper addresses questions of the following nature: under what conditions does a welfare-improving reform of the existing piecewise linear income tax schedule necessitate a change in a particular agent type's marginal tax rate? Our analysis therefore addresses the sorts of questions...

Household needs must be taken into account when designing an equitable income tax. If the equivalence scale is income dependent it is not transparent how to achieve equity. In this paper we explore the question of horizontal equity and the implications for progression (vertical equity), when the...

This paper addresses questions of the following nature: under what conditions does a welfare-improving reform of a nonlinear income tax system necessitate a change in a particular agent's marginal tax rate or total tax burden? Our analysis is therefore a study in tax reform, rather than in...

This paper addresses the question as to whether it is optimal to use separating or pooling nonlinear income taxation, or to use linear income taxation, when the government cannot commit to its future tax policy. We consider both two-period and infinite-horizon settings. Under empirically...

This paper evaluates the impact of smoking bans on smoking using a policy change introduced by the UK government. We present a theoretical model of smoking that defines an individual’s life-cycle addiction and cigarette consumption in the presence and in the absence of a public smoking...