According to a widely held belief, ?all who are able to work, should work?. We consider this statement within a framework of non-linear taxation. The crucial difference between our model and the standard model is that the government can distinguish between productive persons and the disabled. A...

The incidence and efficiency losses of taxes have usually been analysed in isolation from public expenditures. This negligence of the expenditure side may imply a serious misperception of the effects of marginal tax rates. The reason is that part of the marginal tax may in fact be payment for...

We evaluate the impact of the rise in food prices during 2006-2008 on the poverty and extreme poverty rates in Mexico. We concentrate on the poor’s consumption of staple foods, and analyze the change in their consumption brought about by changed prices. We also allow households receiving...

This work intends to specify a formula for the optimal taxation in Probabilistic Voting Models with Single Mindedness Theory. The goal is to find an equivalent expression to the Ramsey’s rule for a political economy environment where Governments are assumed to be Leviathans rather than...

In this paper I analyse a labour market where the wage is endogenously determined according to an Efficient Bargaining process between a firm and a labour union whose members are partitioned into two social groups: the old and the young. Furthermore, I exploit the Single-Mindedness theory, which...

How should we compare welfare across pension systems in presence of differential mortality? A commonly used standard utilitarian criterion implicitly favors the long-lived over the short-lived. We investigate under what conditions this ranking is reversed. We clearly distinguish between the...

The UK welfare system has undergone three very profound periods of reform of the post-war model laid down by Beveridge. The first was a move in the direction of (but never fully converged with) the Bismarkian model of a contributory social insurance model with time limited earnings related...

Present-biased preferences cause distortions in consumption that can motivate the use of paternalistic in-kind transfers. Empirically, goods are consumed to different degrees when consumption outlay changes. Economists distinguish between necessary goods and luxury goods. A present-biased...

Redistribution programs are constrained because those not working may be either unable to work, voluntarily unemployed or involuntarily unemployed. The inability to distinguish among these three cases inhibits the targeting of transfers to those most in need. Enabling the government to monitor...

Recently, early investments in the human capital of children from socially disadvantaged environments have attracted a great deal of attention. Programs of such early intervention, aiming at children's health and well-being, are spreading considerably in the U.S. and are currently tested in...