How Do Taxes Affect Human Capital? The Role of Intergenerational Mobility
AbstractThis paper investigates how explicitly modeling the intergenerational transmission of human capital modifies the effects of tax policies obtained from standard life-cycle models. The main finding is that the intergenerational persistence of human capital is not an important determinant of the steady-state and transitional effects of several commonly studied tax policies. Conventional life-cycle models closely approximate the predictions generated by models with realistic intergenerational mobility properties. However, intergenerational persistence can substantially magnify the effects of policies that distort job training investment.
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Bibliographic InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 11929.
Date of creation: 01 Jan 2001
Date of revision:
Publication status: Published in Review of Economic Dynamics 2001, vol. 4, pp. 695-735
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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
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Other versions of this item:
- Lutz Hendricks, 2001. "How Do Taxes Affect Human Capital? The Role of Intergenerational Mobility," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(3), pages 695-735, July.
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
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