Optimal redistribution with labor supply dependent productivity

Date

2026-01-01

Author

Gürer, Eren
Weichenrieder, Alfons J.

Metadata

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We study optimal nonlinear income taxation when productivity depends negatively on labor supply (labor-supply-dependent productivity, LSDP). Relative to a benchmark model with fixed productivities, we find that LSDP leads to higher optimal marginal tax rates, especially for higher-income individuals, and greater redistribution. The key mechanism is that, under LSDP, marginal taxation becomes a more effective screening instrument.

Subject Keywords

Optimal redistribution, Productivity, Working hours

URI

https://www.scopus.com/inward/record.uri?partnerID=HzOxMe3b&scp=105042133760&origin=inward
https://hdl.handle.net/11511/119651

Journal

International Tax and Public Finance

DOI

https://doi.org/10.1007/s10797-026-09981-5

Collections

Department of Economics, Article

Citation Formats

E. Gürer and A. J. Weichenrieder, “Optimal redistribution with labor supply dependent productivity,” International Tax and Public Finance, pp. 0–0, 2026, Accessed: 00, 2026. [Online]. Available: https://www.scopus.com/inward/record.uri?partnerID=HzOxMe3b&scp=105042133760&origin=inward.