Redistribution and the marginal cost of public funds

Article Abstract:

The role of the marginal cost of public funds on redistribution was investigated using a econometric model with heterogeneous consumers and a linear income tax. In addition, the tradeoff between redistribution from high-wage to low-wage laborers and labor market distortions was examined. Empirical results showed that the marginal cost of public funds remains the same for all sources of finance and under certain assumptions less than one in an optimal tax environment. In contrast, the marginal cost of public funds varies between different sources of funds in the absence of optimality.

Public Finance Activities, Econometrics & Model Building, Public Finance-Total Govt, Econometrics, Public finance, Distribution (Economics), Business models, Direct costing

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A framework for analyzing the political support for active labor market policy

Article Abstract:

A general equilibrium framework showed that the structure of the labor market determines the political support for anti-unemployment policies. Political support for active labor market policy is more likely when there is greater elasticity of demand and there are higher benefits to the long-term unemployed. Support also increases when the employed have limited unemployment experience and when the unskilled labor demand is inelastic.

Regulation, Licensing, and Inspection of Miscellaneous Commercial Sectors, Labor Regulation & Services, Economic aspects, Political aspects, Labor policy, Manpower policy

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Unemployment and increasing private returns to human capital

Article Abstract:

A mathematical model has been constructed to demonstrate the interaction between the collection of the factors of production of physical and human capital and real wage rigidity. The model assumes that skilled and unskilled workers are perfect substitutes, and the arbitrage criterion between employing a skilled and unskilled worker is reflected as a positive association between their relative unemployment rates.

Workers by Type, Human capital

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