Redistributive Taxation, Inequality, and Intergenerational Mobility
AbstractEducation decisions determine a great part of future income. This paper argues that if education is financed by parents' current income a lump-sum tax reduces inequality if all parents have strict investment incentives. However, if some parents are indifferent there is a possible decrease in the wage gap via a contrary indirect tax effect which drops the returns of schooling. Under strict incentives social mobility is not affected, but it increases if skilled parents have weak incentives and decreases if unskilled parents are indifferent in their investment decision.
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Bibliographic InfoPaper provided by Helmut Schmidt University, Hamburg in its series Working Paper with number 68/2007.
Length: 27 pages
Date of creation: Oct 2007
Date of revision:
Intergenerational mobility; Inequality; Redistribution; Lump- sum tax;
Find related papers by JEL classification:
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J62 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Job, Occupational and Intergenerational Mobility; Promotion
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-09-20 (All new papers)
- NEP-LAB-2008-09-20 (Labour Economics)
- NEP-PUB-2008-09-20 (Public Finance)
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