Arbeitspapier

Redistribution and Education Subsidies are Siamese Twins

We develop models of optimal linear and non-linear income taxation with endogenous human capital formation to explore optimal education subsidies. Optimal subsidies on education ensure efficiency in human capital accumulation and thus play an important role in alleviating the tax distortions on learning induced by redistributive policies. If the government cannot verify all investments in human capital, education policy offsets some but not all tax-induced distortions on learning. Non-pecuniary educational costs (benefits) may increase (decrease) subsidies on education, especially if they are complementary to work effort.

Language
Englisch

Bibliographic citation
Series: Tinbergen Institute Discussion Paper ; No. 05-036/3

Classification
Wirtschaft
Subject
human capital
education subsidies
progressive taxation
redistribution
Bildungsfinanzierung
Bildungsertrag
Einkommensteuer
Optimale Besteuerung
Kapitalertragsteuer
Theorie

Event
Geistige Schöpfung
(who)
Bovenberg, A. Lans
Jacobs, Bas
Event
Veröffentlichung
(who)
Tinbergen Institute
(where)
Amsterdam and Rotterdam
(when)
2005

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Bovenberg, A. Lans
  • Jacobs, Bas
  • Tinbergen Institute

Time of origin

  • 2005

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