Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/170869
Authors: 
Van den Berge, Wiljan
Jongen, Egbert L. W.
van der Wiel, Karen
Year of Publication: 
2017
Series/Report no.: 
IZA Discussion Papers 10885
Abstract: 
Policymakers are concerned about potential underinvestment in lifelong learning. In this paper we study to what extent a tax deduction helps to stimulate post-initial training. Specifically, we employ a regression kink and regression discontinuity design as jumps in tax bracket rates generate exogenous variation in the effective costs of lifelong learning. Using high quality data on tax returns of the universe of Dutch taxpayers, we find that the tax deduction has heterogeneous effects on lifelong learning. Low-income singles show no response. For high-income singles we find an effect of 10% on the probability to use the tax deduction. Furthermore, ignoring shifting of expenses between partners leads to spurious large estimates for primary earners and spurious negative estimates for secondary earners.
Subjects: 
lifelong learning
tax deduction
RKD
RDD
JEL: 
C21
H20
J24
Document Type: 
Working Paper

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