Hungerbühler, Mathias; Lehmann, Etienne; Parmentier, Alexis - In: Review of Economic Studies 73 (2006) 3, pp. 743-767
This paper characterizes optimal non-linear income taxation in an economy with a continuum of unobservable productivity levels and endogenous involuntary unemployment due to frictions in the labour markets. Redistributive taxation distorts labour demand and wages. Compared to their efficient...
