We model complexity in social programs as a by-product of the screening process. While a
more rigorous screening process may improve targeting efficiency, the associated …

This article analyses the design of optimal unemployment insurance in a search equilibrium
framework where search effort among the unemployed is not perfectly observable. We …

The decentralization of fiscal authority to lower level jurisdictions contributes to the efficient
delivery of public services, but conflicts with national objectives. This paper argues that the …

We examine whether minimum wages can fulfill a useful role as part of an optimal tax-
transfer scheme. The government cannot observe household abilities, only their incomes …

This article presents a survey of how optimal income taxation is influenced by labour market
considerations. We begin with the standard supply-side optimal income tax model of …

Tax policies are informed by principles developed in the tax theory and policy literature. This
Element surveys the policy lessons that emerge from optimal tax analysis since the 1970s …

This paper revisits the normative properties of search‐matching economies when
homogeneous workers have concave utility functions and wages are bargained over. The …

Regions inhabited with an immobile population of disabled and able individuals compete to
attract mobile firms that provide jobs. The redistributive goal of regional governments is to …

This paper studies optimal income taxation in an environment where matching frictions
generate a trade-off for workers between high wages and low unemployment risk. A higher …

This paper is related to the literature on optimal nonlinear taxation under right-to-manage
wage formation, and we assume that the fall-back profit facing firms during wage bargaining …