In an economy which could not accommodate  full employment of its labor force, it employs some labor but does not employ others. The bipartition of the labor force is random, and we characterize it by a  probability distribution with equal employment opportunity. We value each employed individual by his or her marginal contribution to the production function; we also value each unemployed individual by the potential marginal contribution the person would make if the market hired the individual. We fully honor both the individual value and its national aggregates in distributing the net production to the unemployment welfare and the employment benefits. Using a real-time balanced budget rule of taxation, we derive a fair, debt-free, and asymptotic risk-free tax rate for any given unemployment rate. The tax rate minimizes both the asymptotic mean and variance of the underlying posterior unemployment rate ; it also stimulates employment , boosts productivity, and mitigates income inequality. One could apply the  distribution rule and valuation approach to areas other than labor markets . This framework is open to alternative identification strategies and other forms of equal opportunity.
In an economy which could not accommodate the full employment of its labor force, it employs some labor but does not employ others. The bipartition of the labor force is random, and we characterize it by a compound Beta-Binomial probability distribution with equal employment opportunity. We value each employed individual by his or her marginal contribution to the production function; we also value each unemployed individual by the potential marginal contribution the person would make if the market hired the individual. We fully recognize both the individual value and its national aggregates in distributing the net production to the unemployment welfare and the employment benefits. Using a real-time balanced budget rule of taxation, we derive a fair, debt-free, and asymptotic risk-free tax rate for any given unemployment rate. The tax rate minimizes the asymptotic mean , variance, semi-variance, and mean absolute deviation of the underlying posterior unemployment rate . The allocation rule stimulates employment and boosts productivity. Under some symmetry assumptions, we find that an unemployed person should also enjoy equivalent employment benefits, and the tax rate goes with this welfare equality. The tool employed is the cooperative game theory in which we assume a large number of players. The players are randomly bi-partitioned, and the payoff varies with the partition. Thus, one could apply the fair distribution rule and valuation approach to other profit-sharing or cost-sharing situations with similar characteristics . This framework is open to alternative identification strategies and other forms of equal opportunity.
A
the
A
compound Beta-Binomial
R
honor
recognize
D
both
R
and variance
, variance, semi-variance, and mean absolute deviation
R
; it also stimulates employment , boosts productivity, and mitigates income inequality. One
. The allocation rule stimulates employment and boosts productivity. Under some symmetry assumptions, we find that an unemployed person should also enjoy equivalent employment benefits, and the tax rate goes with this welfare equality. The tool employed is the cooperative game theory in which we assume a large number of players. The players are randomly bi-partitioned, and the payoff varies with the partition. Thus, one
A
fair
R
areas other than labor markets
other profit-sharing or cost-sharing situations with similar characteristics