Optimal skill distribution under convex skill costs

Leung, Tin Cheuk and Yazıcı, Hakkı (2018) Optimal skill distribution under convex skill costs. Central Bank Review, 18 (1). pp. 29-34. ISSN 1303-0701 (Print) 1305-8800 (Online)

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Abstract

This paper studies optimal distribution of skills in an optimal income tax framework with convex skill constraints. The problem is cast as a social planning problem where a redistributive planner chooses how to distribute a given amount of aggregate skills across people. We find that optimal skill distribution is either perfectly equal or perfectly unequal, but an interior level of skill inequality is never optimal.
Item Type: Article
Uncontrolled Keywords: Skill distribution; Convex skill costs; Optimal taxation
Subjects: H Social Sciences > HJ Public Finance
Divisions: Faculty of Arts and Social Sciences > Academic programs > Economics
Faculty of Arts and Social Sciences
Depositing User: Hakkı Yazıcı
Date Deposited: 14 Aug 2018 21:46
Last Modified: 26 Apr 2022 09:59
URI: https://research.sabanciuniv.edu/id/eprint/36120

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