Atkinson-Stiglitz Theorem with Endogenous Human Capital Accumulation
Recently, researchers have started to re-examine the so-called Atkinson-Stiglitz theorem on optimal commodity taxation. The essence of such research is to examine whether or not it is optimal to distort markets other than the labor market for achieving the second-best resource allocation. I examine this theorem by introducing the comparative advantage of human capital accumulation. More specifically, I assume that people with high ability obtain a higher return from skilled human capital accumulation than people with low ability. I explore the implication of this comparative advantage of human capital accumulation for the Atkinson-Stiglitz theorem on optimal commodity taxation.
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Volume (Year): 7 (2007)
Issue (Month): 1 (September)
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References listed on IDEAS
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- Robin Boadway & Katherine Cuff, 1999.
"A Minimum Wage can be Welfare-Improving and Employment-Enhancing,"
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- Boadway, Robin & Cuff, Katherine, 2001. "A minimum wage can be welfare-improving and employment-enhancing," European Economic Review, Elsevier, vol. 45(3), pages 553-576, March.
- Robin Boadway & Katherine Cuff, 1999. "A Minimum Wage Can Be Welfare-Improving and Employment-Enhancing," Cahiers de recherche CREFE / CREFE Working Papers 72, CREFE, Université du Québec à Montréal.
- Konishi, Hideo, 1995. "A Pareto-improving commodity tax reform under a smooth nonlinear income tax," Journal of Public Economics, Elsevier, vol. 56(3), pages 413-446, March.
- J. A. Mirrlees, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Oxford University Press, vol. 38(2), pages 175-208.
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