Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/208516
Year of Publication: 
2005
Series/Report no.: 
Working paper No. 23-2005
Publisher: 
Copenhagen Business School (CBS), Department of Economics, Frederiksberg
Abstract: 
This paper examines the effect of taxes on the individuals' choices of educational direction, and thus on the economy.s skill composition. A proportional labour tax induces too many workers with high innate ability to choose an educational type associated with high consumption value and low effort. This increases the skill mismatch and aggregate unemployment in the economy. The government can correct for this distortion by use of differentiated tuition fees or tax rates.
Subjects: 
Unemployment
matching
education
optimal taxation
tuition fees
JEL: 
H21
H24
J64
J68
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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