Intergenerational Transmission of Skills during Childhood and Optimal Public Policy

Alessandra Casarico, Luca Micheletto and Alessandro Sommacal

No 3343, CESifo Working Paper Series from CESifo

Abstract: The paper characterizes the optimal tax policy and the optimal quality of day care services in a OLG model with warm-glow altruism where parental choices over child care arrangements affect the probability that the child becomes a high-skilled adult in a type-specific way. With respect to previous contributions, optimal tax formulas include type-specific Pigouvian terms which correct for the intergenerational externality in human capital accumulation. Our numerical simulations suggest that a public policy that disregards the effects of parental time on children's human capital entails a welfare loss that ranges from 0:2% to 5:7% of aggregate consumption.

Keywords: optimal taxation; day care quality; intergenerational transmission of skills; early childhood environment; warm-glow (search for similar items in EconPapers)
JEL-codes: H21 H23 J13 J22 J24 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Intergenerational transmission of skills during childhood and optimal public policy (2015)
Working Paper: Intergenerational transmission of skills during childhood and optimal public policy (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_3343

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