01359nam a22001577a 4500999001900000008004100019100002400060245005300084260004900137300003200186520079800218773004901016906002201065942000701087952010701094  c525948d525948240426b           ||||| |||| 00| 0 eng d  aDeng, Minjie951900  aInequality, taxation, and sovereign default risk  aAmerican Economic Journal: Microeconomics     a16(2), Apr, 2024: p.217-249  aIncome inequality and worker migration significantly affect sovereign default risk. Governments often impose progressive taxes to reduce inequality, which redistribute income but discourage labor supply and induce emigration. Reduced labor supply and a smaller high-income workforce erode the current and future tax base, reducing government's ability to repay debt. I develop a sovereign default model with endogenous nonlinear taxation and heterogeneous labor to quantify this effect. In the model, the government chooses the optimal combination of taxation and debt, considering its impact on workers' labor and migration decisions. Income inequality accounts for one-fifth of the average US state government spread. –Reproduced

https://www.aeaweb.org/articles?id=10.1257/mac.20210133
 
  aAmerican Economic Journal: Microeconomics     aINCOME INEQUALITY  cAR  00102ddc40709401002aIIPAbIIPAd2024-04-26h16(2), Apr, 2024: p.217-249pAR131741r2024-04-26yAR