We investigate how the optimal nonlinear income tax schedule is modified when taxpayers can evade taxation by emigrating. We consider two symmetric countries with Maximin governments. Workers choose their labor supply along the intensive margin. The skill distribution is continuous, and, for...

This article examines unemployment disparities and efficiency in a densely populated economy with two job centers and workers distributed between them. We introduce commuting costs and search-matching frictions to deal with the spatial mismatch between workers and firms. In equilibrium, there...

This paper develops a general method to solve the optimal nonlinear income tax model with one action (individual pre-tax income) and multidimensional characteristics. Individuals differ in terms of skills and belong to different groups. A group is a subset of individuals with the same vector of...

This paper argues that, for a given overall level of labour income taxation, a more progressive tax schedule reduces the unemployment rate and increases the employment rate. From a theoretical point of view, higher progressivity induces a wage-moderation effect and increases overall employment...

In this paper, we develop a model of innovation-based growth to address the issue of skill-biased technical change over the long run. We show that innovations fluctuate endogenously from skill-intensive to unskilled-intensive sectors, thereby generating periods of increasing and decreasing wage...

This papers revisits the normative properties of search-matching economies when workers have concave utility functions. A general equilibrium framework is developed where agents are homogeneous and wages are bargained over. Assuming lump-sum taxation of profits, the optimal allocation of...

We investigate whether the optimal income tax model of Mirrlees (1971) can reproduce the empirically observed increasing average tax rates. We give a necessary condition and exhibit two examples where the optimal average tax rates are increasing.

In this paper, I build a wage bargaining model to study the consequences of unemployment insurance and unemployment assistance on unemployment. I show that indexing the unemployment insurance benefit on the last wage earned increase the level of unemployment. I describe necessary conditions to...

We propose a canonical model of optimal nonlinear redistributive taxation with matching unemployment. In our model, agents are endowed with different skill levels and labor markets are perfectly segmented by skill. The government only observes negotiated wages. More progressive taxation leads to...