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Learning by Doing and Ben-Porath: Life-cycle Predictions and Policy Implications

Author

Listed:
  • Adam Blandin

    (Department of Economics, Virginia Commonwealth University)

Abstract
Many government policies affect incentives to acquire human cap- ital. Two workhorse models dominate the literature analyzing these policies: Learning by Doing (LBD) and Ben-Porath (BP). This pa- per makes two novel findings related to these models. First, LBD and BP generate different life-cycle predictions. Second, the model features that generate different life-cycle predictions between mod- els also generate different policy implications. Specifically, increasing marginal labor tax rates for top earners depresses human capital accumulation more under BP. As a result, the Laffer curve for top marginal income tax rates is flatter, and peaks 10 percentage points lower, with BP versus LBD.

Suggested Citation

  • Adam Blandin, 2016. "Learning by Doing and Ben-Porath: Life-cycle Predictions and Policy Implications," Working Papers 1604, VCU School of Business, Department of Economics.
    • Handle: RePEc:vcu:wpaper:1604
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    Citations

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    Cited by:

    1. Benjamin Griffy, 2018. "Borrowing Constraints, Search, and Life-Cycle Inequality," Discussion Papers 18-01, University at Albany, SUNY, Department of Economics.

    More about this item

    Keywords

    Life-cycle; Human capital; Progressive taxes;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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