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Title:Taxing education in Ramsey's tradition PDF Logo
Authors:Richter, Wolfram F.
Issue Date:2009
Series/Report no.:Ruhr economic papers 140
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. Furthermore, if the earnings function displays constant elasticity, the choice of education should not be distorted. With the necessary qualifications the results extend to the case when taxpayers are heterogeneous and when the planner trades off efficiency against equity.
Subjects:Endogenous choice of education, labour, and saving
second-best efficient taxation
linear instruments
finite periods
Ramsey's Rule
Power Law of Learning
JEL:H21
I28
J24
ISBN:978-3-86788-158-6
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des RWI
Ruhr Economic Papers, RWI

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