This paper is concerned with the measurement of individual welfare in labour supply models which allow for the impact of income taxation and income support schemes on labour supply decisions. The paper is motivated by the concern over the need to have measures which can be interpreted easily,...

This paper examines the computation of welfare measures for use with labour supply models. The standard method of computing compensating and equivalent variations does not allow sufficiently for the nonlinearity of the budget constraint in such models. An alternative method is suggested and...

Heterogeneity is likely to be an important determinant of the shape of optimal tax schemes. This article addresses the issue in a model à la Mirrlees with a continuum of agents. The agents differ in their productivities and opportunity costs of work, but their labor supplies depend only on a...