Arbeitspapier
Optimal Income Taxation with Endogenous Human Capital
This paper augments the theory of optimal linear income taxation by taking into account human capital accumulation as a dimension of labor supply. The distribution of earning potentials is endogenous because agents differ in the ability to learn. Taxation affects utilization rates of human capital through labor supply responses. The costs of education that are not deductible from the income tax distort the learning decision as well. We show theoretically that the trade-off between efficiency and equity is worsened. Quantitative analysis shows that the distortionary costs of taxation increase substantially when human capital formation is endogenous.
- Language
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Englisch
- Bibliographic citation
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Series: Tinbergen Institute Discussion Paper ; No. 02-045/2
- Classification
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Wirtschaft
Taxation and Subsidies: Efficiency; Optimal Taxation
Time Allocation and Labor Supply
Human Capital; Skills; Occupational Choice; Labor Productivity
- Subject
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optimal linear taxation
labor supply
human capital accumulation
Einkommensteuer
Optimale Besteuerung
Bildungsinvestition
Arbeitsangebot
Theorie
- Event
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Geistige Schöpfung
- (who)
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Jacobs, Bas
- Event
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Veröffentlichung
- (who)
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Tinbergen Institute
- (where)
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Amsterdam and Rotterdam
- (when)
-
2002
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Jacobs, Bas
- Tinbergen Institute
Time of origin
- 2002
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