Aggregate marginal costs of public funds

Authors

DOI:

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

Keywords:

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

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.

Additional Files

Published

2022-06-01

How to Cite

Dagsvik, J. K., & Strøm, S. (2022). Aggregate marginal costs of public funds. Public Sector Economics, 46(2), 239–260. https://doi.org/10.3326/pse.46.2.3

Issue

Vol. 46 No. 2 (2022)

Section

Articles

License

Copyright (c) 2022 John K. Dagsvik, Steinar Strøm

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