Education, redistributive taxation and confidence
AbstractWe 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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Date of creation: Jan 2005
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education ; redistribution ; confidence;
Other versions of this item:
- Konrad, Kai Andreas & Spadaro, Amedeo, 2005. "Education, redistributive taxation and confidence," Discussion Papers, Research Unit: Market Processes and Governance SP II 2005-05, Social Science Research Center Berlin (WZB).
- Konrad, Kai A. & Spadaro, Amedeo, 2005. "Education, Redistributive Taxation and Confidence," IZA Discussion Papers 1478, Institute for the Study of Labor (IZA).
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
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