In this paper we examine the optimal taxation problem in a two sector economy with heterogeneous agents. We show that in a steady state of this economy the optimal capital income tax rate can be different from zero. In this economy since capital and labour margins are interdependent, any...

In this paper we examine the optimal taxation problem in a two sector economy with heterogeneous agents. We show that in a steady state of this economy the optimal capital income tax rate can be different from zero. In this economy since capital and labour margins are interdependent, any...

This paper studies the optimal taxation between luxury and necessity goods. We set up a three-production-sector neoclassical growth model with inelastic labor supply, and analyze the tax incidence. We find that the two consumption taxes are neutral to economic growth and that the welfare...

While high rates of youth unemployment are a severe problem in most European countries, the program evaluation literature shows that di sadvantaged youths constitute a group that is particularly difficult to assist effectively. As innovative measures are thus needed, we evaluate a German pilot...

Individuals wishing to get married have made increasing use of matchmakers. This notwithstanding, economists have paid scant attention to the strategies employed by matchmakers and to the likelihood of success arising from the use of these strategies. Consequently, we first specify a...

Horrace and Oaxaca (2001) treat the regressors in gender wage gap by industry measures as non-stochastic when computing the corresponding standard errors. However, the non-stochastic regressors assumption is thought to be inappropriate in modern econometrics. In this paper, we derive the correct...

The paper perceives education as a type of money burning activity, much like advertisement, and examines its effect on social welfare. In a model where the employer's job assignment also functions as a signal a la Waldman (1984), there exists a separating equilibrium in which education credibly...

This paper assesses the effects of ASEAN5's international trade on their level of employment. By applying the labor demand model of Greenaway et al. (1999), we classified ASEAN5's international trade into two cases: (1) intra-ASEAN5 trade and (2) trade with the world market. Our estimated...

The study analyzes the performance of the Zheng test for functional form in different scenarios concerning the distribution approximation of the test statistic. We apply the test statistic for validating simple wage functions.

The paper contributes to the literature on gender-based disparity in human capital by extending existing results on educational attainment to the number of years of experience that female vs. male managers have among informal or unregistered firms. Using the case of Rwanda, results show that the...