Optimal Mirrleesian Taxation in Non-competitive Labor Markets

We study optimal labor income taxation in non-competitive labor markets.Firms with market power offer screening contracts to workers privatelyinformed about their own productivity. We provide necessary and sufficientconditions... [ view full abstract ]

We study optimal labor income taxation in non-competitive labor markets.
Firms with market power offer screening contracts to workers privately
informed about their own productivity. We provide necessary and sufficient
conditions for tax implementation of constrained efficient allocations in
such environment. For a Utilitarian objective, if an allocation is
implementable almost all workers face negative marginal tax rates, however,
not all allocations that are implementable in a competitive setting are
implementable in this non-competitive environment.