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original papers : Altruism, redistribution and social insurance

Author

Listed:
  • Udo Ebert

    (Department of Economics, University of Oldenburg, D-26111 Oldenburg, Germany)

  • Oskar von dem Hagen

    (Department of Economics, University of Oldenburg, D-26111 Oldenburg, Germany)

Abstract

The paper examines the influence of altruism on voluntary transfers and government redistribution in a simple model: two jobs of different productivity are assigned by chance to two individuals. Ex ante the individuals are identical, ex post they have different incomes. The first part of the paper examines voluntary transfers determined ex post or agreed upon ex ante in the absence of altruism. In the second part, the influence of altruism is examined. Altruism is modelled as a pure public good: the minimum consumption (or income, since there is only one consumption good). Both individuals can contribute to its provision, one person by earning wage income, the other by voluntary transfers. The ex ante solutions generally lead to higher expected welfare but create several incentive problems. Only lump-sum transfers are considered.

Suggested Citation

  • Udo Ebert & Oskar von dem Hagen, 2000. "original papers : Altruism, redistribution and social insurance," Review of Economic Design, Springer;Society for Economic Design, vol. 5(4), pages 365-385.
    • Handle: RePEc:spr:reecde:v:5:y:2000:i:4:p:365-385
    Note: Received: 28 February 1997 / Accepted: 31 January 2000
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    References listed on IDEAS

    as
    1. Hans-Werner Sinn, 1994. "A Theory of the Welfare State," CESifo Working Paper Series 65, CESifo.
    2. Stiglitz, Joseph E., 1987. "Pareto efficient and optimal taxation and the new new welfare economics," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 2, chapter 15, pages 991-1042, Elsevier.
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    6. Lester C. Thurow, 1971. "The Income Distribution as a Pure Public Good," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 85(2), pages 327-336.
    7. Summers, Lawrence H, 1989. "Some Simple Economics of Mandated Benefits," American Economic Review, American Economic Association, vol. 79(2), pages 177-183, May.
    8. Dennis Kaufman, 1995. "Negative externalities and welfare improving preference changes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 6(1), pages 53-71, July.
    9. Smith, Vincent H. & Kehoe, Michael R. & Cremer, Mary E., 1995. "The private provision of public goods: Altruism and voluntary giving," Journal of Public Economics, Elsevier, vol. 58(1), pages 107-126, September.
    10. Jack Hirshleifer, 1983. "From weakest-link to best-shot: The voluntary provision of public goods," Public Choice, Springer, vol. 41(3), pages 371-386, January.
    11. Hochman, Harold M & Rodgers, James D, 1969. "Pareto Optimal Redistribution," American Economic Review, American Economic Association, vol. 59(4), pages 542-557, Part I Se.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Sera Linardi & Nita Rudra, 2015. "Globalization and Redistribution Towards the Poor in Developing Countries: Experimental Evidence from India," Artefactual Field Experiments 00399, The Field Experiments Website.

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    More about this item

    Keywords

    Altruism; redistributive taxation; social insurance; public good; voluntary transfers;
    All these keywords.

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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