Optimal Distribution and the Family
Scandinavian Journal of Economics, 1996.
Posted: 21 Oct 1996
Income tax burdens, welfare payments, and social security benefits depend on the composition of family units. Substantial controversy exists over the appropriate forms of adjustment, as reflected by the wide variation in methods among programs, across jurisdictions, and over time. In contrast to approaches based on "ability to pay" or equivalence scales, this article uses a utilitarian welfare function to derive the equitable distribution of income for different family configurations. The analysis considers how allocations should depend on family sharing arrangements, economies of scale, altruism among family members, and differences in utility functions among family members.
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