In this paper, individuals, initially living in a Mirrleesian economy A, have outside options consisting in settling down in a laissez-faire country B while paying positive migration costs. We first examine the impact of the threat of migration, assuming participation constraints are taken into...

In a model where agents have unequal skills and heterogeneous preferences about consumption goods and leisure, this paper studies how to combine linear commodity taxes and non-linear income tax. It proposes a particular social welfare function on the basis of fairness principles. It then derives...

This paper characterizes the optimal redistributive taxation when individuals are heterogeneous in two exogenous dimensions: their skills and their values of non-market activities. Search-matching frictions on the labor markets create unemployment. Wages, labor demand and participation are...

This article discusses the properties of Kolm’s ELIE proposal in the Context of optimal income taxation “à la Mirrlees”. It first shows that ELIE gives rise to non-standard type-dependent budget sets, which has important implications in terms of a minimum labour requirement. Second, it...

Simula and Trannoy (2007) have shown that ELIE is confronted with implementation issues when the policymaker cannot observe the time worked by every individual. This paper tries to fix this problem. To this aim, it characterizes the second-best allocations which are the closest to ELIE (i) in...

This paper examines how allowing individuals to emigrate to pay lower taxes changes the optimal non-linear income tax scheme in a Mirrleesian economy. Type-dependent participation constraints are borrowed from contract theory. An individual emigrates if his domestic utility is less than his...

Xu’s theorem comforts ranking the freedom of choice provided by budget sets as their volume in deriving it from three axioms. Yet, one and a half of these axioms can be discussed. In contrast, simple logic – it seems – leads one to order the freedom provided by budgets sets as the distance...

We investigate the conditions under which an inequality averse and additively separable welfarist constitution maker would always choose to set up a progressive equalization payment scheme in a federation with local public goods. A progressive equalization payment scheme is defined as a list of...

We study time-consistent labor and capital income linear taxation using an infinite-horizon overlapping generations model of a small open economy. In dividuals have different productivities and the government intervenes for purely redistributive purposes. The study of time-consistent taxation...

This paper analyzes a class of two-stage Cournot games where firms are collusive in the first stage, and shows that oligopolists may have a strong incentive to redistribute resources (such as capital, pollution permits etc...) within the industry as a means of coordinating their output decision....