We analyze optimal taxation of labor and capital income in a life-cycle framework with idiosyncratic income risk. We … independent of the social welfare function and determined by the degree of income risk and risk aversion. The optimal linear … provide a novel decomposition of labor income tax formulas into a redistribution and an insurance component. The latter is …

Using detailed tax data from the Swiss canton of Bern, I examine how changes in wealth are related to income risk. I … find that only among elderly individuals high kurtosis of income risk may be positively correlated with wealth accumulation … wealth investors experience sharp increases in wealth and income in subsequent periods. Finally, wealth risk is more …

Empirically, the income share is procyclical for the low-income groups and acyclical for the top 5%. We find that …

. We discuss estimation of impulse response functions and variance decompositions in such large systems, and present …

The question of whether there is a connection between income and psychological well-being is a long-studied issue … higher levels of income later in life. We focus on earnings approximately one decade after the person's well-being is … happiness. We consider how psychological well-being may influence income. Sobel-Goodman mediation tests reveal direct and …

their lives. Much of the early research concluded that the role of income in determining well-being was limited, and that … only income relative to others was related to well-being. In this paper, we review the evidence to assess the importance of … absolute and relative income in determining well-being. Our research suggests that absolute income plays a major role in …

We estimate household equivalence scales using income satisfaction data from the German Socio-Economic Panel. We extend … previous studies applying this approach by taking reference income into account. This allows separating needs-based from … reference effects in the determination of income satisfaction. We show that this adjustment helps to overcome a bias causing an …

can get an estimate of the taxable income elasticity from the bunching pattern around a kink point. The bunching estimator … cannot identify the taxable income elasticity when the functional form of the distribution of preference heterogeneity is … unknown. We find that an observed distribution of taxable income around a kink point in a budget set can be consistent with …