in income concentration. When performance-based contracts are needed to incentivize effort, redistribution through … progressive income taxes becomes less precisely targeted. Taxation reduces after-tax income in-equality but undermines performance …-based contracts, lowering effort and raising pre-tax income differentials. Product market integration can widen the spread of project …

, and redistribution through unemployment benefits is efficient. Empirical applications show that these interactions between …This paper analyzes the interactions between redistribution and unemployment insurance policies and their implications … for the optimal design of tax-benefit systems. In a setting where individuals with different earnings abilities are …