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Endogenous Selection of Comparison Groups, Human Capital Formation, and Tax Policy

Oded Stark, Walter Hyll and Yong Wang ()
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Yong Wang: http://www.univie.ac.at/Wirtschaftswissenschaften

Vienna Economics Papers from University of Vienna, Department of Economics

Abstract: 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 tocompare 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.

JEL-codes: D11 H24 H30 J24 (search for similar items in EconPapers)
Date: 2010-09
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http://homepage.univie.ac.at/Papers.Econ/RePEc/vie/viennp/vie1009.pdf (application/pdf)

Related works:
Journal Article: Endogenous Selection of Comparison Groups, Human Capital Formation, and Tax Policy (2012) Downloads
Working Paper: Endogenous Selection of Comparison Groups, Human Capital Formation, and Tax Policy (2011) Downloads
Working Paper: Endogenous selection of comparison groups, human capital formation, and tax policy (2011) Downloads
Working Paper: Endogenous Selection of Comparison Groups, Human Capital Formation, and Tax Policy (2010) Downloads
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