Optimal Human Capital Policies

Marek Kapicka and Radim Bohacek ()

No 464, 2007 Meeting Papers from Society for Economic Dynamics

Abstract: We calibrate the model to the U.S. economy in order to quantify these policies and evaluate their impact in the transition and in the steady state. We find that, when the optimal schooling policies are implemented jointly with the optimal income taxes then they are negligible and their effect is small. If, however, the income taxes are not set optimally then the optimal schooling subsidies are relatively large and have significant aggregate effects.

Date: 2007
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