Aggregate marginal costs of public funds

In this paper, we discuss aggregate measures of marginal costs of public funds (MCF) in populations that are heterogeneous with respect to observed as well as unobserved characteristics. We first discuss how to compute MCF in selected examples of traditional (textbook) labour supply models. Next, we...

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Bibliographic Details
Published inFinancial theory and practice
Main Authors Dagsvik, John K, Strøm, Steinar Øivind
Format Journal Article
LanguageNorwegian
Published Institute of Public Finance, Zagreb 2022
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Summary:In this paper, we discuss aggregate measures of marginal costs of public funds (MCF) in populations that are heterogeneous with respect to observed as well as unobserved characteristics. We first discuss how to compute MCF in selected examples of traditional (textbook) labour supply models. Next, we review two types of discrete labour supply models proposed in the literature. Subsequently, we discuss how to calculate aggregate measures of MCF for discrete labour supply models. Finally, we apply an estimated two-sector discrete labour supply model to compute MCF based on Norwegian data.
ISSN:1846-887X
1845-9757