Document Type

Article

Date

9-2008

Keywords

tbd

Disciplines

Economics

Description/Abstract

We examine the socially optimal wealth distribution in a two-person two-good model with heterogeneous workers and asymmetric social interactions where only one (social) individual derives positive or negative utility from the leisure of the other (non-social) individual. We show that the interdependence can effectively counter-act the need to transfer wealth to low-wage individuals and may require them to be poorer by all objective measures. We demonstrate that in the presence of social interactions it can be socially desirable to keep substantial wealth inequality.

Additional Information

This manuscript is from Social Science Research Network, for more information see http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1267825#1049969

Source

Harvested from ssrn.com

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