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Title:Income taxation, tuition subsidies, and choice of occupation : implications for production efficiency PDF Logo
Authors:Bjertnæs, Geir Haakon
Issue Date:2005
Series/Report no.:CESifo working papers 1627
Abstract:The desirability for production efficiency is re-examined in this study, where agents choose occupation based on lifetime income net of tuition costs. Efficient revenue raising implies that the government should trade off efficiency in production for efficiency in intertemporal consumption, as capital income is taxed in optimum. The subsequent wage difference between high- and low-skilled occupations is increased compared to a production efficient outcome, which is in contrast to previous results in the literature.
Subjects:optimal income taxation
subsidies for tuition
skill formation
production efficiency
JEL:H21
H24
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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