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Investment in Education and Redistributive Taxation without Precommitment

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  • Panu Poutvaara

Abstract

This paper compares private investment in risky education in a laissezfaire economy and with income redistribution. Obtaining higher education requires time and may require paying nondeductible resource costs. The paper shows that redistributive taxation may actually increase private investment in risky education also without precommitment.

Suggested Citation

  • Panu Poutvaara, 2002. "Investment in Education and Redistributive Taxation without Precommitment," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(2), pages 177-188, May.
  • Handle: RePEc:mhr:finarc:urn:sici:0015-2218(2002/200305)59:2_177:iieart_2.0.tx_2-j
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    1. Hansson, Ingemar & Stuart, Charles, 1989. "Why Is Investment Subsidized?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(3), pages 549-559, August.
    2. Anderberg Dan & Perroni Carlo, 2003. "Time-Consistent Policy and Politics: Does Voting Matter When Individuals Are Identical?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-19, March.
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    4. Andersson, Fredrik & Konrad, Kai A., 2001. "Globalization and Human Capital Formation," IZA Discussion Papers 245, Institute of Labor Economics (IZA).
    5. Boadway, Robin & Marceau, Nicolas & Marchand, Maurice, 1996. "Investment in Education and the Time Inconsistency of Redistributive Tax Policy," Economica, London School of Economics and Political Science, vol. 63(250), pages 171-189, May.
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    Cited by:

    1. Panu Poutvaara, 2006. "On the political economy of social security and public education," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(2), pages 345-365, June.
    2. Andersson, Fredrik & Konrad, Kai A, 2003. "Globalization and Risky Human-Capital Investment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 10(3), pages 211-228, May.
    3. Sebastian Findeisen & Dominik Sachs, 2018. "Education Policies and Taxation without Commitment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 120(4), pages 1075-1099, October.
    4. Dan Anderberg & Carlo Perroni, "undated". "Renegotiation of Social Contracts by Majority Rule," EPRU Working Paper Series 00-15, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    5. Andersson, Fredrik & Konrad, Kai A., 2001. "Globalization and Human Capital Formation," CEPR Discussion Papers 2657, C.E.P.R. Discussion Papers.

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    More about this item

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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