Optimal redistribution when different workers are indistinguishable

Maurice Marchand*, Pierre Pestieau, María Racionero

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    12 Citations (Scopus)


    Using the standard non linear income and commodity taxation framework, we examine the optimal policy to be adopted when the same labour disutility can receive two opposite interpretations: taste for leisure and activity limitation. In the absence of complete information about individual characteristics, an income tax does not allow distinguishing lazy from handicapped individuals. One may rely, however, on a combination of commodity and income taxes to redistribute from the former to the latter when they differ in their preferences for commodities.

    Original languageEnglish
    Pages (from-to)911-922
    Number of pages12
    JournalCanadian Journal of Economics
    Issue number4
    Publication statusPublished - Nov 2003

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