Human capital and optimal redistribution
Winfried Koeniger and
Julien Prat
No 497, CFS Working Paper Series from Center for Financial Studies (CFS)
Abstract:
We characterize optimal redistribution in a dynastic family model with human capital. We show how a government can improve the trade-off between equality and incentives by changing the amount of observable human capital. We provide an intuitive decomposition for the wedge between human-capital investment in the laissez faire and the social optimum. This wedge differs from the wedge for bequests because human capital carries risk: its returns depend on the non-diversifiable risk of children's ability. Thus, human capital investment is encouraged more than bequests in the social optimum if human capital is a bad hedge for consumption risk.
Keywords: human capital; optimal taxation (search for similar items in EconPapers)
JEL-codes: E24 H21 I22 J24 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-cta, nep-dge and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)
Downloads: (external link)
https://www.econstor.eu/bitstream/10419/103959/1/805017895.pdf (application/pdf)
Related works:
Journal Article: Human Capital and Optimal Redistribution (2018)
Working Paper: Human Capital and Optimal Redistribution (2017)
Working Paper: Human Capital and Optimal Redistribution (2015)
Working Paper: Human Capital and Optimal Redistribution (2014)
Working Paper: Human Capital and Optimal Redistribution (2014)
Working Paper: Human Capital and Optimal Redistribution (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:zbw:cfswop:497
Access Statistics for this paper
More papers in CFS Working Paper Series from Center for Financial Studies (CFS) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().