Tax Effects of Unemployment and the Choice of Educational Type
This paper examines the effect of taxes on the individuals’ choices of educational direction, and thus on the economy’s skill composition. A proportional labour income tax induces too many workers with high innate ability to choose an educational type with high consumption value and low effort costs. This increases the skill mismatch and aggregate unemployment in the economy. The government can correct for this distortion by use of differentiated tuition fees or tax rates.
|Date of creation:||20 Apr 2005|
|Date of revision:|
|Contact details of provider:|| Postal: Department of Economics, Stockholm, S-106 91 Stockholm, Sweden|
Phone: +46 8 16 20 00
Fax: +46 8 16 14 25
Web page: http://www.ne.su.se/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bruce, Donald, 2000. "Effects of the United States tax system on transitions into self-employment," Labour Economics, Elsevier, vol. 7(5), pages 545-574, September.
- Driffill, E John & Rosen, Harvey S, 1983.
"Taxation and Excess Burden: A Life Cycle Perspective,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(3), pages 671-83, October.
- E. John Driffill & Harvey S. Rosen, 1981. "Taxation and Excess Burden: A Life-Cycle Perspective," NBER Working Papers 0698, National Bureau of Economic Research, Inc.
- Christopher Pissarides, 1997.
"The impact of employment tax cuts on unemployment and wages : the role of unemployment benefits and tax structure,"
LSE Research Online Documents on Economics
2332, London School of Economics and Political Science, LSE Library.
- Pissarides, Christopher A., 1998. "The impact of employment tax cuts on unemployment and wages; The role of unemployment benefits and tax structure," European Economic Review, Elsevier, vol. 42(1), pages 155-183, January.
- Christopher A. Pissarides, 1997. "The Impact of Employment Tax Cuts on Unemployment and Wages: The Role of Unemployment Benefits and Tax Structure," CEP Discussion Papers dp0361, Centre for Economic Performance, LSE.
- Pestieau, P. & Possen, U., 1990.
"Tax evasion and occupational choice,"
CORE Discussion Papers
1990033, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- PESTIEAU, Pierre & POSSEN, Uri M., . "Tax evation and occupational choice," CORE Discussion Papers RP 967, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Pestieau, P. & Possen, U.M., 1988. "Tax Evasion And Occupational Choice," Papers 404, Cornell - Department of Economics.
- Kevin A. Hassett, 1999.
"Tax Policy and Investment,"
American Enterprise Institute, number 53049, 9.
- Theodore W. Schultz, 1960. "Capital Formation by Education," Journal of Political Economy, University of Chicago Press, vol. 68, pages 571.
- Heckman, James J, 1976. "A Life-Cycle Model of Earnings, Learning, and Consumption," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages S11-44, August.
- R. Glenn Hubbard & William M. Gentry, 2000. "Tax Policy and Entrepreneurial Entry," American Economic Review, American Economic Association, vol. 90(2), pages 283-287, May.
- Nielsen, Soren Bo & Sorensen, Peter Birch, 1997. "On the optimality of the Nordic system of dual income taxation," Journal of Public Economics, Elsevier, vol. 63(3), pages 311-329, February.
- Parker, Simon C, 1996. "A Time Series Model of Self-Employment under Uncertainty," Economica, London School of Economics and Political Science, vol. 63(251), pages 459-75, August.
- Michael J. Boskin, 1975. "Notes on the Tax Treatment of Human Capital," NBER Working Papers 0116, National Bureau of Economic Research, Inc.
- Roger H. Gordon & Julie Berry Cullen, 2002. "Taxes and Entrepreneurial Activity: Theory and Evidence for the U.S," NBER Working Papers 9015, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:hhs:sunrpe:2005_0004. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sten Nyberg)
If references are entirely missing, you can add them using this form.