The Inefficiency of Unemployment: The Supervision Perspective
研究一个存在昂贵劳动监督的经济体，发现通过征收特定劳动所得税并补贴其他部门，可以实现帕累托改进，从而证明失业存在低效率。
We study an example economy with costly labor monitoring under a wage-cum-supervision arrangement, where workers' utilities are not equalized across sectors (workers are identical to each other). Our main task is to look for (and find) a set of "flat" taxes and subsidies that bring about a Pareto improvement over the laissez-faire solution. We show that any of such welfare-improving schemes involves a tax on labor income from those workers whose utility is the lowest.