Everyone may benefit from subsidising entry to risky occupations

• 成果类型: Article
• 署名作者: Black, J; de Meza, D
• 署名单位: Aberystwyth University; University of Exeter
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(97)00048-0
• 发表日期: 1997
• 页码: 409-424
• 关键词: risky occupations; subsidised entry

摘要

This paper shows that in the presence of costly state verification, directly or indirectly subsidising entry to risky occupations may benefit everyone. The result holds even in the presence of private insurance. Indeed, it may be desirable to prohibit private insurance in favour of subsidies to hazardous activities. These findings do not depend on the government having an advantage over the private sector in observing outcomes. The explanation is that through its influence on equilibrium price, feasible fiscal policy can shift the return distribution so as to create collective insurance more cheaply than is possible through private contracting with its requirement of costly auditing. Amongst applications is a case for a loss-making state bank offering high interest-rate loans. (C) 1997 Elsevier Science S.A.