Taxing human capital efficiently when qualified labour is mobile

Arbeitspapier

The paper studies the effect that skilled labour mobility has on efficient education policy. The model is one of two periods in which a representative taxpayer decides on labour, education, and saving. The government can only use linear tax and subsidy instruments. It is shown that the mobility of skilled labour well constrains government's choice of policy instruments. The mobility does not however affect second best education policy in allocational terms. In particular, education should be effectively subsidized if, and only if, the elasticity of the earnings function is increasing in education. This rule applies regardless of whether labour is mobile or immobile.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 3366

Classification and Topics

• Classification: Wirtschaft ; Taxation and Subsidies: Efficiency; Optimal Taxation ; Education: Government Policy ; Human Capital; Skills; Occupational Choice; Labor Productivity
• Subject: mobile labour ; second-best efficient taxation ; linear instruments ; residence vs. source principle ; Bildungsverhalten ; Lohnsteuer ; Optimale Besteuerung ; Qualifikation ; Facharbeiter ; Internationale Arbeitsmobilität ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Richter, Wolfram F. ; Kunze, Lars
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/46321
• Last update: 01.11.0003, 12:00 AM CET