On Thursday, January 26, noon-14 pm, Giacomo Corneo from Freie Universität Berlin will be the speaker of the Research Seminar in Economics. He will present his research paper on "Time-Poor, Working, Super-Rich" at Kaminzimmer (room 202), Boltzmannstraße 20, Berlin-Dahlem.

Time-Poor, Working, Super-Rich
Abstract: This paper revisits the standard model of labor supply under two additional assumptions: consumption requires time and some limited amount of work is enjoyable. Whereas introducing each assumption without the other one does not produce novel insights, combining them together does if the wage rate is sufficiently high. For top earners, work has a positive marginal utility at the optimum and above a critical wage level it converts into a pure consumption good. Their labor-supply curve is …rst backward bending and then vertical. This can justify an optimal marginal tax rate on top incomes equal to 100 percent. Top earners in the vertical half-line of the labor-supply curve optimally refrain from spending their entire income. At the macroeconomic level, this can generate a lack of effective demand. With some quali…cations, these …ndings carry over to models that include savings and philanthropy.

For more information on the program of the Economic Research Seminar please klick follow this link.