Arbeitspapier

Income Tax, Consumption Value of Education, and the Choice of Educational Type

How the tax system might affect the individual's educational level is well studied. But the question of how the tax system affects the individual's choice of educational type is mostly ignored. This is an important issue, since the educational choice of today's young generation determines the skill composition of tomorrow's labor force and hence the future production possibilities of the country. This paper studies the problem in a partial model. A progressive tax system might in fact introduce distortions in the individuals's educational choice and induce him to choose more of the educational type with the higher consumption value. If he also puts more weight on the present than on the future, this effect is strengthened further.

Language
Englisch

Bibliographic citation
Series: CESifo Working Paper ; No. 1055

Classification
Wirtschaft

Event
Geistige Schöpfung
(who)
Alstadsæter, Annette
Event
Veröffentlichung
(who)
Center for Economic Studies and ifo Institute (CESifo)
(where)
Munich
(when)
2003

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Alstadsæter, Annette
  • Center for Economic Studies and ifo Institute (CESifo)

Time of origin

  • 2003

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