Original scientific paper

https://doi.org/10.3326/pse.46.2.3

Aggregate marginal costs of public funds

John K. Dagsvik ; Research Department, Statistics Norway, Oslo, Norway
Steinar Strøm ; Department of Economics, University of Oslo, the University of Turin and the Ragnar Frisch Centre, Oslo, Norway

Abstract

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.

Keywords

marginal costs of public funds; discrete choice labour supply; compensated labour supply

Hrčak ID:

278732

URI

https://hrcak.srce.hr/278732

Publication date:

1.6.2022.

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