000			01244nam a22001457a 4500
999			_c525948 _d525948
008			240426b ||||| |||| 00| 0 eng d
100			_aDeng, Minjie _951900
245			_aInequality, taxation, and sovereign default risk
260			_aAmerican Economic Journal: Microeconomics
300			_a16(2), Apr, 2024: p.217-249
520			_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
773			_aAmerican Economic Journal: Microeconomics
906			_aINCOME INEQUALITY
942			_cAR