?url_ver=Z39.88-2004&rft_id=603&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Adc&rft.relation=https%3A%2F%2Fpublications.ut-capitole.fr%2Fid%2Feprint%2F18615%2F&rft.title=Income+Taxation+with+Frictional+Labor+Supply&rft.creator=Werquin%2C+Nicolas&rft.subject=B-+ECONOMIE+ET+FINANCE&rft.description=This+paper+characterizes+the+optimal+labor+income+taxes+in+an+environment+where+individual+labor+supply+choices+are+subject+to+adjustment+frictions.+Agents+incur+a+fixed+cost+of+adjusting+their+hours+of+work+in+response+to+changes+in+their+idiosyncratic+wages+or+their+tax+rates.+This+fixed+cost+can+be+thought+of+as+the+cost+of+searching+for+a+new+job+in+an+economy+where+hours+are+constrained+within+the+firm.+I+derive+a+formula+that+characterizes+the+optimal+long-run+progressive+tax+schedule+in+this+economy.+Adjustment+frictions+generate+endogenously+an+extensive+margin+of+labor+supply+conditional+on+participation.+In+addition+to+the+standard+intensive+margin+disincentive+effects+of+taxes%2C+the+optimal+schedule+takes+into+account+their+effects+on+the+option+value+of+adjusting+hours+of+work%2C+and+therefore+depends+on+several+new+elasticities+and+marginal+social+welfare+weights.+I+then+evaluate+the+quantitative+magnitude+of+these+novel+theoretical+effects+and+show+that+for+a+given+intensive+margin+labor+supply+elasticity%2C+the+optimal+long-run+tax+schedule+is+less+progressive+than+a+frictionless+model+would+predict%2C+because+an+increase+in+progressivity+raises+the+dispersion+of+individual+incomes+around+their+desired+values.+The+welfare+miscalculations+by+wrongly+assuming+a+frictionless+economy+can+be+large%2C+and+are+decreasing+in+the+size+of+the+intensive+margin+labor+income+elasticity.+The+insights+of+this+paper+apply+more+broadly+to+models+where+fixed+costs+interact+with+non-linear+policy+instruments+to+yield+long-run+aggregate+effects.&rft.date=2016-04&rft.type=Monograph&rft.type=NonPeerReviewed&rft.format=text&rft.language=fr&rft.identifier=https%3A%2F%2Fpublications.ut-capitole.fr%2Fid%2Feprint%2F18615%2F1%2FWerquin2015.pdf&rft.identifier=++Werquin%2C+Nicolas+%3Chttps%3A%2F%2Fwww.idref.fr%2F22388863X%3E++(2016)+Income+Taxation+with+Frictional+Labor+Supply.+++++++&rft.relation=http%3A%2F%2Ftse-fr.eu%2Fpub%2F29854&rft.relation=603&rft.identifier=603&rft.language=en