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Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI), Essen >
Ruhr Economic Papers, RWI >
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http://hdl.handle.net/10419/26777
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| Title: | | Taxing human capital efficiently: the double dividend of taxing nonqualified labour more heavily than qualified labour  |
| Authors: | | Richter, Wolfram F. |
| Issue Date: | | 2007 |
| Series/Report no.: | | Ruhr economic papers 12 |
| Abstract: | | Assuming isoelastic returns to education and an endogenous supply of qualified and nonqualified labour, it is shown to be second-best efficient not to distort the choice of education. Furthermore, taxation should set incentives so that qualified labour is substituted for nonqualified labour. As a result, it is efficient to tax labour income regressively with respect to qualification and to tax the monetary cost of education at a level that restores efficiency in education. Atax on capital income alleviates the distortion that progressive taxation of labour income exerts on human-capital investment. |
| Subjects: | | Endogenous choice of education and labour efficient taxation of human and nonhuman capital double-dividend hypothesis |
| JEL: | | H21 I28 J24 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des RWI Ruhr Economic Papers, RWI
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