Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/46256 
Year of Publication: 
2011
Series/Report no.: 
CESifo Working Paper No. 3343
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
The paper characterizes the optimal tax policy and the optimal quality of day care services in a OLG model with warm-glow altruism where parental choices over child care arrangements affect the probability that the child becomes a high-skilled adult in a type-specific way. With respect to previous contributions, optimal tax formulas include type-specific Pigouvian terms which correct for the intergenerational externality in human capital accumulation. Our numerical simulations suggest that a public policy that disregards the effects of parental time on children's human capital entails a welfare loss that ranges from 0:2% to 5:7% of aggregate consumption.
Subjects: 
optimal taxation
day care quality
intergenerational transmission of skills
early childhood environment
warm-glow
JEL: 
H21
H23
J13
J22
J24
Document Type: 
Working Paper
Appears in Collections:

Files in This Item:
File
Size
347.46 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.