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Education, redistributive taxation and confidence

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  • Kai A. Konrad

    (Freie University Berlin - Freie University Berlin)

  • Amadéo Spadaro

    (Universitat de les Illes Balears - Universitat de les Illes Balears, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris)

Abstract

We consider redistributional taxation between people with and without human capital if education is endogenous and if individuals differ in their perceptions about own ability. Those who see their ability as low like redistributive taxation because of the transfers it generates. Those who see their ability as high may also like redistributive taxation because it stops other people receiving education and increases the quasi rents on their own human capital. It is surprising that this rather indirect effect can overcompensate them for the income loss from taxation and make the overconfident want higher taxes than the less confident do. The results, however, turn out to be in line with empirical evidence on the desired amount of redistribution among young individuals.

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Bibliographic Info

Paper provided by HAL in its series PSE Working Papers with number halshs-00590862.

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Date of creation: Jan 2005
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Handle: RePEc:hal:psewpa:halshs-00590862

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Keywords: education ; redistribution ; confidence;

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References

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Cited by:
  1. repec:hal:wpaper:halshs-00590555 is not listed on IDEAS
  2. Salvador Ball & Amadéo Spadaro, 2006. "Optimal nonlinear labor income taxation in dynamic economies," PSE Working Papers halshs-00590555, HAL.
  3. Bernasconi, Michele & Profeta, Paola, 2012. "Public education and redistribution when talents are mismatched," European Economic Review, Elsevier, vol. 56(1), pages 84-96.
  4. Schneider, Andrea, 2010. "Redistributive taxation vs. education subsidies: Fostering equality and social mobility in an intergenerational model," Economics of Education Review, Elsevier, Elsevier, vol. 29(4), pages 597-605, August.
  5. Falch, Torberg & Fischer, Justina AV, 2011. "Welfare state generosity and student performance: Evidence from international student tests," MPRA Paper 35269, University Library of Munich, Germany.

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