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This paper studies the role of social insurance as a redistributive mechanism in the presence of an optimal (linear or general) income tax. It considers a second-best setting with two unobservable individual characteristics: ability, measured by the wage rate, and risk, measured by the...
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This paper provides a unified treatment of externalities associated with fertility and human capital accumulation as they relate to pension systems. It considers as overlapping generations model in which every generation consists of high earners and low earners with the proportion of types being...
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We study the design of child-care policies when redistribution matters. Traditional mothers provide some informal child … redistribution across couples and efficiency are separable. Redistribution is performed via lump-sum transfers and taxes which are … care at a Pigouvian rate. However, in a second-best setting, a trade-off between efficiency and redistribution emerges. The …
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This Paper studies the design of education policies in a setting of successive generations with heterogeneous individuals (high and low earning ability). Parents’ investment in education is motivated by warm-glow altruism and determines the probability that a child has high ability. Education...
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