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Public Pensions in a Multi-Period Mirrleesian Income Tax Model

Author

Listed:
  • Spencer Bastani
  • Sören Blomquist
  • Luca Micheletto

Abstract

Using an OLG model with skill uncertainty and private savings, we investigate whether an optimally designed set of public pension transfers can usefully supplement a nonlinear labor income tax as a welfare-enhancing policy instrument. We consider a Mirrleesian setting where agents' skills are private information and highlight that, even though pensions, by crowding out private savings, adversely affect the achievement of the golden-rule, they can be used as a mimicking-deterring device that makes it easier for the government to achieve the desired redistributive goals.

Suggested Citation

  • Spencer Bastani & Sören Blomquist & Luca Micheletto, 2016. "Public Pensions in a Multi-Period Mirrleesian Income Tax Model," CESifo Working Paper Series 6206, CESifo.
    • Handle: RePEc:ces:ceswps:_6206
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    public pensions; dynamic optimal income taxation; capital income taxation; tagging;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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