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Identifier to cite or link to this item: https://hdl.handle.net/10086/29303

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Title
Optimal human capital policies under the endogenous choice of educational types
Creator
Creator Name
OBARA, Takuya OBARA, Takuya
Affiliation
Affiliation Name
Hitotsubashi University
Key Word
Human capital
Education subsidies
Labor income taxation
Capital income taxation
Consumption value of education
JEL
H2
H5
I2
J2
Abstract (distribution restricted)
This study examines optimal human capital policies under non-linear labor and capital income taxes in the presence of consumption value of education in a two-period setting. We show that when individuals can choose educational types differing by the relative importance of consumption value and production value, education subsidies for low-type individuals should not equal an efficient level that offsets distortions induced by non-linear taxes on labor and capital income. Our findings imply that education policy does not restore efficiency, or the Diamond-Mirrlees production efficiency theorem fails. Moreover, capital income taxation is optimal, which means that the Atkinson-Stiglitz theorem breaks down.
Description
Revised version
Publisher
Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University
Issued Date
2018-06
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
CCES Discussion Paper Series ; No. 66_v2
ReplacesRelation -
Related Identifier
HDL
  http://hdl.handle.net/10086/28759
Relation
Related Title
This is a revised version of http://hdl.handle.net/10086/28759.
Number of Pages
33
Appears in Collections
CCES Discussion Paper Series
URL
https://hdl.handle.net/10086/29303