Jonathan Eaton, Harvey S. Rosen; Optimal Redistributive Taxation and Uncertainty*, The Quarterly Journal of Economics, Volume 95, Issue 2, 1 September 1980, Pag

this paper is to analyze theoretically the effect of taxation on human capital accumulation in a model which explicitly allows for uncertainty

In this paper we examine the factors affecting the structure of executives' compensation packages. We focus particularly on the role of various types of delayed compensation as means of “bonding” executives to their firms. The basic problem is to design a compensation package that rewards actions that are in the long-run interest of the stockholders. Firms must take into account their ability to discern unfortunate circumstances from mismanagement, the extent to which a compensation package forces the executive to face risks beyond his control, and the willingness of a given executive to bear this risk. We use our theory to interpret some executive compensation data from the early 1970s.

In this paper we examine the factors affecting the structure of executives' compensation packages. We focus particularly on the role of various types of delayed compensation as means of “bonding” executives to their firms. The basic problem is to design a compensation package that rewards actions that are in the long‐run interest of the stockholders. Firms must take into account their ability to discern unfortunate circumstances from mismanagement, the extent to which a compensation package forces the executive to face risks beyond his control, and the willingness of a given executive to bear this risk. We use our theory to interpret some executive compensation data from the early 1970s.

MANY COMMODITIES can be viewed as bundles of individual attributes for which no explicit markets exist. It is often of interest to estimate structural demand and supply functions for these attributes, but the absence of directly observable attribute prices poses a problem for such estimation. In an influential paper published several years ago, Rosen [3] proposed an estimation procedure to surmount this problem. This procedure has since been used in a number of applications (see, for example, Harrison and Rubinfeld [2] or Witte, et al. [4]). The purpose of this note is to point out certain pitfalls in Rosen's procedure, which, if ignored, could lead to major identification problems. In Section 2 we summarize briefly the key aspects of Rosen's method as it has been applied in the literature. Section 3 discusses the potential problems inherent in this procedure and provides an example. Section 4 concludes with a few suggestions for future research.

Economists have been paying increasing attention to the study of situations in which csumers face a discrete rather than a continous set of choices.Such models are potentially very important in evaluating the impact of government programs upon consi.mterwelfare.But very little has been said in general regarding the tools of applied welfare economics in discrete choice situations.This paper shows how the conventional methods of applied welfare economics can be modified to handle such cases.It focuses on the cornputation of the excess burden of taxation, and the evaluation of gua].itychange.The results are applied to stochastic utility models, including the popular cases of prohit and logit analysis.Throughout, the ernp)-asis is on providing rigorous guidelines for carrying out applied work.

A common feature to most aggregative studies of the labor market is a marginal productivity expression in which the quantity of labor appears on the left hand side of the equation, and the right hand side includes the real wage and output. A number of researchers have cautioned that if the output variable is treated as exogenous, serious econometric difficulties may result. However, the assumption that output is exogenous has not been tested. In this paper, we estimate an equilibrium model of the labor market, and use it to test the assumption of output exogeneity. We find that the assumption that output is exogenous cannot be rejected by the data.

AN important question in contemporary 1AILeconomics is whether or not the real wage clears the labor market. Its answer has bearing on issues as diverse as the nature of unemployment, the efficacy of fiscal and monetary policies, and the incidence of income taxes. Unfortunately, consensus as to the correct answer seems to be lacking. While much of modern macroeconomic theory allows for the possibility that the real wage fails to equate the supply and demand of labor (Barro and Grossman, 1971; Korliras, 1975), much analysis is based on the assumption of equilibrium in the labor market (Patinkin, 1965). The purpose of the present paper is to carry out an econometric test for which view of the labor market is more appropriate. Although the model we build is very aggregative and much too crude to be used as a basis for policy, we believe that it provides a first step in making operational the theoretical literature on disequilibrium macro models. Our tentative conclusion is that the hypothesis of a labor market in continuous equilibrium must be rejected. In section II we describe briefly some earlier work on modelling the aggregate supply and demand for labor. It is shown that prior studies either assume equilibrium in the labor market, or deal with disequilibrium inadequately. In section III we specify the disequilibrium model. Section IV contains a discussion of estimation problems, an interpretation of the results, and a comparison with an equilibrium version of the model. A concluding section has a summary and an agenda for future research. II. Antecedents