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- W2169966110 abstract "This paper shows that the combination of habit formation – present consumption creating additional consumption needs in the future – and myopia may explain why some retirees are forced to unretire, i.e., unexpectedly return to work. It also shows that when myopia about habit formation leads to unretirement there is a case for government's intervention. In a first-best setting the optimal solution can be decentralized by a simple Pigouvian (paternalistic) consumption tax (along with suitable lump-sum taxes). In a second-best setting, when personalized lump-sum transfers are not available, consumption taxes may have conflicting paternalistic and redistributive effects. We study the design of consumption taxes in such a setting when myopic individuals differ in productivity." @default.
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- W2169966110 date "2008-01-01" @default.
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- W2169966110 title "Habit Formation and Labor Supply" @default.
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- W2169966110 doi "https://doi.org/10.2139/ssrn.1159702" @default.
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