Two alternative relative compensation schemes are compared with respect to total output that can be generated at a given sum of salaries. While the promotion regime guarantees that any salary increase is permanent, the premium system allows a reduction in the income of an agent to the base...

In long-term private health insurance contracts, aging provisions are used to flatten premium profiles. An individual would like to change insurers if she perceives a low service quality. The first-best optimum is characterized by provision transfers which are higher for high risks and may be...

Hierarchical and comprehensive school systems are compared with respect to efficiency. At given ability, a student's probability of not completing school rises with increasing mean ability in class. Both school systems can yield identical average failure rates. Given that output losses in case...

This paper studies a two-region model in which unemployment, education decisions and interregional migration are endogenous. The poorer region exhibits both lower wages and higher unemployment rates, and migrants to the richer region are disproportionally skilled. The brain drain from the poor...

We consider a bargaining model in which husband and wife decide on the allocation of time and disposable income. Since her bargaining power would go down otherwise more strongly, the wife agrees to have a child only if the husband also leaves the labor market for a while. The daddy months...

We present a non-cooperative model of a family’s time allocation between work and a home-produced public good, and examine whether the income tax should apply to couples or individuals. While tax-induced labor supply distortions lead to overprovision of the public good, spouses’ failure to...

In this paper the direction of the long-run migration incentive in the presence of closed borders and the long-run welfare effects of a regime change from ’autarky’ to ’free permanent migration’ are studied. A difference in birth-country specific fertility rates is treated as the final...

We consider a sequential game in which one player produces a public good and the other player can influence this decision by making an unconditional transfer. An efficient allocation requires the Lindahl property: the sum of the two (implicit) individual prices has to be equal to the resource...

In German-style private health insurance contracts, aging provisions are used to flatten premium profiles. An individual would like to change insurer if she perceives a low service quality. The first-best optimum is characterized by provision transfers upon insurer changes which are higher for...