In an economy which could not accommodate full employment of its labor force, it employs some  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  marginal contribution to the production  ; we also value each unemployed individual by the potential marginal contribution he would make if the market hired him . We fully honor both the individual value and its national aggregate in our distribution of the net production to the unemployment welfare and the employment benefits. Using a  balanced budget rule of taxation, we derive a fair, debt-free, and  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 also apply the rate and valuation approach to areas other than the labor market . This framework is open to alternative identification strategies and other forms of equal opportunity.
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.
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labor
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or her
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function
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he
the person
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him
the individual
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aggregate in our distribution of
aggregates in distributing
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real-time
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asymptotic
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also apply the rate
apply the distribution rule
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the labor market
labor markets