Arbeitspapier

Endogenous selection of comparison groups, human capital formation, and tax policy

This paper considers a setting in which the acquisition of human capital entails a change of location in social space that causes individuals to revise their comparison groups. Skill levels are viewed as occupational groups, and moving up the skill ladder by acquiring additional human capital, which in itself is rewarding, leads to a shift in the individual´s inclination to compare himself with a different, and on average better-paid, comparison group, which in itself is penalizing. The paper sheds new light on the dynamics of human capital formation, and suggests novel policy interventions to encourage human capital formation in the aggregate and, at the same time, reduce inter-group income inequality.

Language
Englisch

Bibliographic citation
Series: ZEF Discussion Papers on Development Policy ; No. 148

Classification
Wirtschaft
Consumer Economics: Theory
Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
Fiscal Policies and Behavior of Economic Agents: General
Human Capital; Skills; Occupational Choice; Labor Productivity
Subject
Human capital formation
Skill levels as occupational groups
Interpersonal comparisons
Relative deprivation
Tax policy
Subsidization
Humankapital
Bildungsniveau
Soziale Ungleichheit
Intelligenz
Bevölkerungsstruktur
Steuerpolitik
Steuerwirkung
Statistisches Auswahlverfahren
Theorie

Event
Geistige Schöpfung
(who)
Stark, Oded
Hyll, Walter
Wang, Yong
Event
Veröffentlichung
(who)
University of Bonn, Center for Development Research (ZEF)
(where)
Bonn
(when)
2011

DOI
doi:10.22004/ag.econ.99415
Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Stark, Oded
  • Hyll, Walter
  • Wang, Yong
  • University of Bonn, Center for Development Research (ZEF)

Time of origin

  • 2011

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