In this paper we study the optimal design of a long term care policy in a setting that includes two types of care to dependent parents: financial assistance and assistance in time by children. The instruments are subsidies to aiding children, financed by a flat tax on earnings. The only source...

The optimal income tax structure is studied in a setting in which workers make discrete labor market decisions and earnings are uncertain. Workers differ continuously along a single dimension that reflects their skills as well as their disutility of work in different jobs. A discrete number of...