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Education Policies and Taxation without Commitment

Sebastian Findeisen and Dominik Sachs

No 14-16, Working Papers from University of Mannheim, Department of Economics

Abstract: We study the implications of limited commitment on education and tax policies chosen by benevolent governments. Individual wages are determined by both innate abilities and education levels. Consistent with real world practices, the government can decide to subsidize different levels of education at different rates. Deviations from full commitment tend to make education policies more progressive, increasing the education subsidy for initially low skilled agents and decreasing it for initially high skilled agents. We provide suggestive cross-country correlations for this mechanism.

Keywords: Education Policies; Time-Inconsistency; Taxation; Inequality (search for similar items in EconPapers)
JEL-codes: H21 H23 I21 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-edu and nep-pub
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https://madoc.bib.uni-mannheim.de/36622/1/Findeisen_und_Sachs_14-16.pdf

Related works:
Journal Article: Education Policies and Taxation without Commitment (2018) Downloads
Working Paper: Education Policies and Taxation without Commitment (2018)
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