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

Oded Stark, Walter Hyll and Yong Wang ()

No 99415, Discussion Papers from University of Bonn, Center for Development Research (ZEF)

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 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.

Keywords: Labor; and; Human; Capital (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cis, nep-hrm, nep-lab and nep-mic
Date: 2011-01
References: View complete reference list from CitEc
Citations: View citations in EconPapers (14) Track citations by RSS feed

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http://ageconsearch.umn.edu/record/99415/files/DP148.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 (2010) Downloads
Working Paper: Endogenous Selection of Comparison Groups, Human Capital Formation, and Tax Policy (2010) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ubzefd:99415

DOI: 10.22004/ag.econ.99415

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