There is clear evidence that fairness plays a role in redistribution. Individuals want tocompensate others for their misfortune, while they allow them to enjoy the fruits of their effort.Such fairness considerations have been introduced in political economy and optimal incometax models with a...

We study fair and efficient tax-benefit schemes based on income and non-income factors under partial control. Partial control means that each factor is a specific mixture of unobserved ability (randomly drawn by nature) and effort (chosen by individuals who differ in tastes). Factors differ in...

Compensation/responsibility theory requires that differences in individual outcomes which can be fully attributed to differences in underlying ‘compensation' factors should be eliminated, while differences in outcomes caused by differential ‘responsibility' factors should be preserved. To...

I analyze whether wage policies - like minimum wages and wage subsidies - can add value to an optimal non-linear earnings tax scheme in a perfectly competitive labour market. Jobs in the labour market differ along two margins: intensity (labour effort) and duration (labour hours). Three key...