Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/55322
Authors: 
Goerke, Laszlo
Year of Publication: 
2012
Series/Report no.: 
CESifo working paper: Public Finance 3719
Abstract: 
A strictly risk-averse individual with an exogenous gross income in period one can acquire human capital in the same period and evade taxes. Period-two income rises with educational investments in period one and can also be hidden from tax authorities. It is shown that a greater tax deductibility of educational investments and higher individual ability induce a positive correlation between tax evasion and educational investments in period two, whereas the relationship in period one is ambiguous. These theoretical predictions can explain diverse empirical findings on the correlation between education and tax evasion.
Subjects: 
human capital
income tax
tax evasion
JEL: 
H24
H26
I20
Document Type: 
Working Paper

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