Taxing Education in Ramsey's Tradition

Wolfram Richter

No 2586, CESifo Working Paper Series from CESifo

Abstract: Assuming a two-period model with endogenous choices of labour, education, and saving, it is shown to be second-best efficient to deviate from Ramsey’s Rule and to distort qualified labour less than nonqualified labour. The result holds for arbitrary utility and learning functions. Efficient incentives for education and saving are analysed under conditions of second and third best. It is argued that efficient tax policy should care more about incentives for education than for saving.

Keywords: endogenous choice of education; labour; and saving; second-best efficient taxation; Power of Law of Learning (search for similar items in EconPapers)
JEL-codes: H21 I28 J24 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Journal Article: Taxing education in Ramsey's tradition (2009)
Working Paper: Taxing Education in Ramsey's Tradition (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2586

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