On the effects of redistribution on growth and entrepreneurial risk-taking
Publikation: Beiträge in Zeitschriften › Zeitschriftenaufsätze › Forschung › begutachtet
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On the effects of redistribution on growth and entrepreneurial risk-taking. / Clemens, Christiane; Heinemann, Maik.
in: Journal of Economics, Jahrgang 88, Nr. 2, 08.2006, S. 131-158.Publikation: Beiträge in Zeitschriften › Zeitschriftenaufsätze › Forschung › begutachtet
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TY - JOUR
T1 - On the effects of redistribution on growth and entrepreneurial risk-taking
AU - Clemens, Christiane
AU - Heinemann, Maik
PY - 2006/8
Y1 - 2006/8
N2 - This paper investigates the effects of redistributive taxation on occupational choice and growth. We discuss a two-sector economy in the spirit of Romer (1990). Agents engage in one of two alternative occupations: either self-employment in an intermediate goods sector characterized by monopolistic competition, or employment as an ordinary worker in this sector. Entrepreneurial profits are stochastic. The occupational choice under risk endogenizes the number of firms in the intermediate goods industry. While the presence of entrepreneurial risk results in a suboptimally low number of firms and depresses growth, nonlinear tax schemes can sometimes compensate negative effects by ex post providing social insurance.
AB - This paper investigates the effects of redistributive taxation on occupational choice and growth. We discuss a two-sector economy in the spirit of Romer (1990). Agents engage in one of two alternative occupations: either self-employment in an intermediate goods sector characterized by monopolistic competition, or employment as an ordinary worker in this sector. Entrepreneurial profits are stochastic. The occupational choice under risk endogenizes the number of firms in the intermediate goods industry. While the presence of entrepreneurial risk results in a suboptimally low number of firms and depresses growth, nonlinear tax schemes can sometimes compensate negative effects by ex post providing social insurance.
KW - Economics
KW - Endogenous growth
KW - Entrepreneurship
KW - Occupational choice
KW - OLG
KW - Redistribution
UR - http://www.scopus.com/inward/record.url?scp=33747140411&partnerID=8YFLogxK
U2 - 10.1007/s00712-006-0191-9
DO - 10.1007/s00712-006-0191-9
M3 - Journal articles
VL - 88
SP - 131
EP - 158
JO - Journal of Economics/ Zeitschrift fur Nationalokonomie
JF - Journal of Economics/ Zeitschrift fur Nationalokonomie
SN - 0931-8658
IS - 2
ER -