Education policies and taxation without commitment Sebastian Findeisen, Dominik Sachs
By: Findeisen, Sebastian
.
Contributor(s): Sachs, Dominik.
Material type: 
ArticlePublisher: 2018Subject(s): ENSEÑANZA | EDUCACION | SUBVENCIONES PUBLICAS | POLITICA FISCAL | TIPOS DE GRAVAMENOnline resources: Click here to access online
In:
The Scandinavian Journal of Economics v. 120, n. 4, 2018, p. 1075-1099Summary: We study the implications of limited commitment on education and tax policies set by benevolent governments. Consistent with real‐world practices, a government can decide to subsidize different levels of education at different rates. A lack of commitment, however, affects the optimal structure of education subsidies. The direction of the effect depends on how labor taxes are designed. With linear labor tax rates and a transfer for redistribution, subsidies become more progressive. By contrast, if the government is only constrained by informational asymmetries when designing taxes, subsidies become more regressive.
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| Artículos | IEF | IEF | OP 1376/2018/4-1 (Browse shelf) | Available | OP 1376/2018/4-1 |
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| OP 1376/2018/3 The Scandinavian Journal of Economics | OP 1376/2018/3-1 Elasticity of taxable income | OP 1376/2018/4 The Scandinavian Journal of Economics | OP 1376/2018/4-1 Education policies and taxation without commitment | OP 1376/2019/1 The Scandinavian Journal of Economics | OP 1376/2019/1-1 Expansionary contractions and fiscal free lunches | OP 1379 Revue française de gestion |
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We study the implications of limited commitment on education and tax policies set by benevolent governments. Consistent with real‐world practices, a government can decide to subsidize different levels of education at different rates. A lack of commitment, however, affects the optimal structure of education subsidies. The direction of the effect depends on how labor taxes are designed. With linear labor tax rates and a transfer for redistribution, subsidies become more progressive. By contrast, if the government is only constrained by informational asymmetries when designing taxes, subsidies become more regressive.
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