Learning by Doing and Ben-Porath: Life-cycle Predictions and Policy Implications

Adam Blandin (ajblandin@vcu.edu)
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Adam Blandin: Department of Economics, Virginia Commonwealth University

No 1604, Working Papers from VCU School of Business, Department of Economics

Abstract: Many government policies affect incentives to acquire human cap- ital. Two workhorse models dominate the literature analyzing these policies: Learning by Doing (LBD) and Ben-Porath (BP). This pa- per makes two novel findings related to these models. First, LBD and BP generate different life-cycle predictions. Second, the model features that generate different life-cycle predictions between mod- els also generate different policy implications. Specifically, increasing marginal labor tax rates for top earners depresses human capital accumulation more under BP. As a result, the Laffer curve for top marginal income tax rates is flatter, and peaks 10 percentage points lower, with BP versus LBD.

Keywords: Life-cycle; Human capital; Progressive taxes (search for similar items in EconPapers)
JEL-codes: D91 E2 H2 J24 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2016-10
New Economics Papers: this item is included in nep-dge and nep-mac
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Citations: View citations in EconPapers (1)

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