Human Capital, Polarisation and Pareto-improving Activating Welfare
研究发现人力资本同时带来收入和直接幸福感，这种双重动机导致技能分布两极分化，而激活型税收转移系统（对穷人收入征负边际税）能实现帕累托改进。
Human capital not only earns income but also is a source of direct felicity. The interaction between these two motives for effort can generate multiple stationary solutions for individual household optimisation. This multiplicity freezes any sufficiently unequal initial skill distribution and persistently segregates households into two separate groups: one rich and educated, one poor and uneducated. If public goods are to be financed, polarisation is typically Pareto-inefficient. While unconditional transfers only reduce the incentive to accumulate skills, activating tax-transfer systems that Pareto-dominate any non-redistributing system exist. Transfers are transitory and a negative marginal income tax is imposed on poor households’ income.