Education Policies and Taxation without Commitment
Sebastian Findeisen and
Munich Reprints in Economics from University of Munich, Department of Economics
We study the implications of limited commitment on education and tax policies set by benevolent governments. Consistent with real-world practices, a government can decide to subsidize different levels of education at different rates. A lack of commitment, however, affects the optimal structure of education subsidies. The direction of the effect depends on how labor taxes are designed. With linear labor tax rates and a transfer for redistribution, subsidies become more progressive. By contrast, if the government is only constrained by informational asymmetries when designing taxes, subsidies become more regressive.
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Published in Scandinavian Journal of Economics 4 120(2018): pp. 1075-1099
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Journal Article: Education Policies and Taxation without Commitment (2018)
Working Paper: Education Policies and Taxation without Commitment (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenar:62816
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