22 / 03

Seminario Académico: "The Welfare Effects of Tax Progressivity with Frictional Labor Markets"

El Departamento de Economía de la Universidad de Chile le invita a participar en el Seminario Académico: 

Título:  "The Welfare Effects of Tax Progressivity with Frictional Labor Markets "

Autor: Alessandra Pizzo Universidad de Chile Phd. en Economía de Paris School of Economics 

          Profesor Asistente del Departamento de Ingeniería de la Universidad de Chile

Presenta: Alessandra Pizzo DII Universidad de Chile

Lugar y hora: Miércoles 22 de marzo de 2017, 13:00 hrs. Sala P 301, Edificio Placa (Diagonal Paraguay 257)





A progressive tax schedule, as it is observed in many developed countries, is usually

justified in terms of redistributive purposes; however, when labor markets are frictional,

progressive taxation has been shown to have a beneficial effect on the unemployment

rate. On the other hand, a more progressive tax schedule discourages individual labor

supply and (precautionary) savings, thus potentially reducing capital accumulation and

total production. In this paper, I take into account the different effects of a progressive

tax and transfer schedule on unemployment, individual labor supply and savings. I

consider the progressive tax and transfer schedule in combination with unemployment

benefits, which are an additional way to provide public insurance against income drop

during unemployment spells. Simple steady state comparisons, based on the utilitarian

welfare criterion, point to the desirability of a tax and transfer schedule with a positive

degree of progressivity, without calling for additional unemployment insurance: in

other words, the welfare criterion calls for a progressive tax schedule combined with

a negative income tax at the bottom of the asset distribution. In terms of modelling

strategy, I start from the workhorse model of Krusell et al. (2010), which combines the

Huggett-Aiyagari framework of heterogeneous agents with matching frictions in the

labor market, and I introduce individual labor supply. I also allow for heterogeneity

in productivity, as in Lifschitz et al. (2016), as well as in preferences for leisure: the

model clarifies that behind the overall welfare effects there is a tension among the low


and high productive individuals with respect to the effects of the different policies.

Se adjunta paper.
Datos del evento
Fecha de inicio 22 de Marzo de 2017 | 13:00 hrs.
Fecha de termino 22 de Marzo de 2017 | 14:00 hrs.
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