Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/18804 
Year of Publication: 
2005
Series/Report no.: 
CESifo Working Paper No. 1440
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We illustrate a novel informational feature of education, which the government may utilize. Discretionary decisions of individuals to acquire education may serve as an additional signal (to earned labor income) on the underlying unobserved innate earning ability, thereby mitigating the informational constraint faced by the government. We establish a case for taxing education, as a supplement to the labor income tax.
Subjects: 
optimal taxation
re-distribution
education
inequality
JEL: 
D6
H2
Document Type: 
Working Paper
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