Tax Effects on Unemployment and the Choice of Educational Type

Annette Alstadsæter, Ann-Sofie Kolm and Birthe Larsen

Discussion Papers from Statistics Norway, Research Department

Abstract: This paper examines the effect of taxes on the individuals' choices of educational direction, and thus on the economy's skill composition. A proportional labour income tax induces too many workers with high innate ability to choose an educational type with high consumption value and low effort costs. This increases the skill mismatch and aggregate unemployment in the economy. The government can correct for this distortion by use of differentiated tuition fees or tax rates.

Keywords: Unemployment; matching; education; optimal taxation; tuition fees (search for similar items in EconPapers)
JEL-codes: H21 H24 J64 J68 (search for similar items in EconPapers)
Date: 2005-01
New Economics Papers: this item is included in nep-edu and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.ssb.no/a/publikasjoner/pdf/DP/dp419.pdf (application/pdf)

Related works:
Working Paper: Tax Effects of Unemployment and the Choice of Educational Type (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ssb:dispap:419

Access Statistics for this paper

More papers in Discussion Papers from Statistics Norway, Research Department P.O.Box 8131 Dep, N-0033 Oslo, Norway. Contact information at EDIRC.
Bibliographic data for series maintained by L Maasø ().