Taxing the Workalcoholics

Addictions are generally considered to have adverse consequences, then what about the workalcoholics? While they obviously work and do not mind, they can bring a contribution to society by producing more and letting others work less. However, as Daniel Hamermesh and Joel Slemrod point out, workalcoholism has health consequences on self (exhaustion, high blood pressure) and on others (enstrangement, divorce). Thus there may be negative externalities.

So, what are to do about it? It is difficult to distinguish this addiction from a genuine lack of preference for leisure. Yet, 30% seem to report themselves as workalcoholic, therefore we seem to face an important problem. Surveys show that those with higher education and income report more frequently to be addicted to work. They tend also to retire later. Thus natural ways to fight this addiction would to have progressive labor income taxation and a mandatory retirement age. One drawback of such policies is, however, that they prevent the exploitation of existing human capital accumulated on the job.