Human Capital and Optimal Redistribution

Konferenzbeitrag

We show that more human capital improves incentives in a standard optimal taxation problem: common assumptions about preferences and technology imply that the disutility of labor decreases less strongly in unobserved ability if agents have more human capital. Human capital thus reduces the informational rents of high ability types and relaxes the incentive constraints. Since parents do not take the effect of human capital on incentives into account when choosing how much to invest into their children, there is a rationale for education subsidies.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2014: Evidenzbasierte Wirtschaftspolitik - Session: Macro Aspects of Optimal Taxation ; No. B07-V3

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Taxation and Subsidies: Efficiency; Optimal Taxation ; Human Capital; Skills; Occupational Choice; Labor Productivity

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Koeniger, Winfried ; Prat, Julien
• Event: Veröffentlichung
• (who): ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
• (where): Kiel und Hamburg
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/100357
• Last update: 10.03.2025, 11:43 AM CET