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Investment in Education and the Time Inconsistency of Redistributive Tax Policy

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  • Robin Boadway
  • Nicolas Marceau
  • Maurice Marchand

Abstract

Time inconsistency of tax policy is shown to arise in a setting in which households differ in their ability to accumulate wealth and the government has redistributional objectives. The government can levy non-distorting taxes but is precluded from redistributing optimally by a self-selection constraint. The analysis is done for the case in which all wealth is human capital, and education is a private good. An argument can be made for public intervention in the provision of education.

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File URL: http://qed.econ.queensu.ca/working_papers/papers/qed_wp_860.pdf
File Function: First version 1992
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Bibliographic Info

Paper provided by Queen's University, Department of Economics in its series Working Papers with number 860.

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Length: 26 pages
Date of creation: Oct 1992
Date of revision:
Handle: RePEc:qed:wpaper:860

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