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Title:Taxing education in Ramsey's tradition PDF Logo
Authors:Richter, Wolfram F.
Issue Date:2009
Series/Report no.:CESifo working paper 2586
Abstract:Assuming a two-period model with endogenous choices of labour, education, and saving, it is shown to be second-best efficient to deviate from Ramsey's Rule and to distort qualified labour less than nonqualified labour. The result holds for arbitrary utility and learning functions. Efficient incentives for education and saving are analysed under conditions of second and third best. It is argued that efficient tax policy should care more about incentives for education than for saving.
Subjects:Endogenous choice of education
labour
and saving
second-best efficient taxation
Power of Law of Learning
JEL:H21
I28
J24
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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