Optimal taxation and human capital policies over the life cycle Stefanie Stantcheva
By: Stantcheva, Stefanie
.
Material type: 
ArticlePublisher: 2017Subject(s): IMPOSICION OPTIMA | CAPITAL HUMANO | EDADES DE LA VIDA | MODELOS ECONOMETRICOSOnline resources: Click here to access online
In:
Journal of Political Economy v. 125, n. 6, December 2017, p. 1931-1990Summary: This paper derives optimal income tax and human capital policies in a life cycle model with risky human capital. The government faces asymmetric information regarding agents' ability, its evolution, and labor supply. When the wage elasticity with respect to ability is increasing in human capital, the optimal subsidy involves less than full deductibility of human capital expenses on the tax base and falls with age. Incomecontingent
loans or a deferred deductibility scheme can implement
the optimum. Numerical results suggest that full deductibility of expenses and that simple linear age-dependent policies
perform very well.
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| Artículos | IEF | IEF | OP 229/2017/6-2 (Browse shelf) | Available | OP 229/2017/6-2 |
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| OP 229/2017/1 Nonlinear effects of taxation on growth | OP 229/2017/5 Taxation and the allocation of talent | OP 229/2017/6-1 The past, present and future of economics | OP 229/2017/6-2 Optimal taxation and human capital policies over the life cycle | OP 229/2018/2 Journal of Political Economy | OP 229/2018/3 Journal of Political Economy | OP 229/2018/4 Journal of Political Economy |
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Resumen.
Bibliografía.
This paper derives optimal income tax and human capital policies in a life cycle model with risky human capital. The government faces asymmetric information regarding agents' ability, its evolution, and labor supply. When the wage elasticity with respect to ability is increasing in human capital, the optimal subsidy involves less than full deductibility of human capital expenses on the tax base and falls with age. Incomecontingent
loans or a deferred deductibility scheme can implement
the optimum. Numerical results suggest that full deductibility of expenses and that simple linear age-dependent policies
perform very well.
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