Optimal educational choice and redistribution when cultural background matters
AbstractHigher education plays an important role in determining lifetime earnings. In turn, the decision to become educated depends to a large extent on family characteristics, such as wealth and cultural background. In this paper, we focus on the interaction between fiscal policies and educational choices when cultural background matters. We derive optimality conditions for a linear income tax and a lump-sum subsidy for education in a dynamic framework in which generations are linked by cultural background. The factors that determine their sign and magnitude include concerns for redistribution, efficiency, and the educational externality on future generations
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Bibliographic InfoPaper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number 59.
Date of creation: 01 Jun 2001
Date of revision:
Publication status: Published in Oxford Economic Papers 2002, vol. 54, pages 435-448
Optimal linear income tax; Subsidies; Higher education; Educational background;
Find related papers by JEL classification:
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-11-05 (All new papers)
- NEP-PBE-2001-11-05 (Public Economics)
- NEP-POL-2001-11-05 (Positive Political Economics)
- NEP-PUB-2001-11-05 (Public Finance)
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