Optimal Taxation with Risky Human Capital

• 成果类型: Article
• 署名作者: Kapicka, Marek; Neira, Julian
• 署名单位: Charles University Prague; Czech Academy of Sciences; Economics Institute of the Czech Academy of Sciences; Czech Academy of Sciences; Economics Institute of the Czech Academy of Sciences; University of Exeter
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20160365
• 发表日期: 2019
• 页码: 271-309
• 关键词: Optimal income taxation; education subsidies; 1st-order approach; life-cycle; earnings; tax; redistribution; elasticities; accumulation; INEQUALITY

摘要

We study optimal tax policies in a-life-cycle economy with permanent ability differences and risky human capital investments that have both an unobservable component, learning effort, and an observable component, schooling. The optimal policies balance redistribution across agents, insurance against human capital shocks, and incentives to learn and work. In the optimum, (i)-high-ability agents face risky consumption while-low-ability agents are insured; (ii) the optimal schooling subsidy is substantial but less than 100 percent; (iii) if utility is separable in labor and learning effort, the inverse labor wedge follows a random walk; and (iv) if the utility is not separable then the no distortion at the top result does not apply. The welfare gains from switching to the optimal tax system are about 1 percent in annual consumption equivalents.