The Distributional Consequences of Tax Reforms Under Capital–Skill Complementarity

Bibliographic Data

ID9724439
AuthorsKonstantinos Angelopoulos (0000-0002-0702-3673, University of Glasgow), Bernardo X Fernandez (Universidad Católica Boliviana San Pablo), Bernardo Fernández (Universidad Católica Boliviana San Pablo), James R Malley (0000-0003-1207-187X, University of Glasgow)
Year2014
Volume81
Issue324
Pages747-767
Publication date2014-10-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueEconomica (JOURNAL)
Journal identifiersISSN: 0013-0427 • E-ISSN: 1468-0335
PublisherWiley (PUBLISHER • GB)
DOI10.1111/ecca.12087
OpenAlexW2105920082
LanguageEN
References cited38

This paper analyses wage inequality and the welfare effects of changes in capital and labour income tax rates for different types of agents. To achieve this, we develop a model that allows for capital–skill complementarity given non‐uniform distributions of asset holdings and labour skills. We find that capital tax reductions lead to the highest aggregate welfare gains but are skill‐biased and thus increase inequality. However, our analysis also shows that the inequality effects of capital tax reductions are lower over the transition period compared with the long run

Capital (architecture) · Complementarity (molecular biology) · Economics · Human capital · Inequality · Labour economics · Market economy · Monetary economics · Physical capital · Wage · Wage Inequality · Welfare · Fiscal Policy and Economic Growth · Gender, Labor, and Family Dynamics · Politics, Economics, and Education Policy

Tools

Open DOISci-HubOpen Access