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Tax policy and returns to education

Author

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  • Booth, A.L.
  • Coles, M.G.

Abstract

This paper considers how asymmetric tax treatment, where labour market earnings are taxed but household production is untaxed, affects educational choice and labour supply. We show that taxes on labour market earnings can generate a large (non-marginal) switch to home production and the ensuing deadweight losses are large. Using a cross-country panel, we find that gender differences in labour supply responses to tax policy can explain differences in aggregate labour supply and years of education across countries.

Suggested Citation

  • Booth, A.L. & Coles, M.G., 2010. "Tax policy and returns to education," Labour Economics, Elsevier, vol. 17(1), pages 291-301, January.
    • Handle: RePEc:eee:labeco:v:17:y:2010:i:1:p:291-301
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    Cited by:

    1. Helmuth Cremer & Pierre Pestieau & Maria Racionero, 2011. "Unequal wages for equal utilities," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 18(4), pages 383-398, August.
    2. Alison Booth & Jan Ours, 2013. "Part-time jobs: what women want?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(1), pages 263-283, January.
    3. Esfahanian , Homa, 2015. "Productivity Investment and Labor Force Participation in Search Equilibrium," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 10(1), pages 23-63, January.
    4. Margit Schratzenstaller-Altzinger, 2012. "Gender-Budgeting im Steuersystem," WIFO Studies, WIFO, number 45759.
    5. Frédéric SALLADARRÉ & Stéphane HLAIMI, 2014. "Women and part-time work in Europe," International Labour Review, International Labour Organization, vol. 153(2), pages 293-310, June.
    6. Margit Schratzenstaller-Altzinger & Fanny Dellinger, 2017. "Genderdifferenzierte Lenkungswirkungen des Abgabensystems," WIFO Studies, WIFO, number 60797.
    7. Wei-Bin Zhang, 2016. "Impact of Education Subsidies and Taxation on Wealth and Human Capital Accumulation," Eastern European Business and Economics Journal, Eastern European Business and Economics Studies Centre, vol. 2(3), pages 222-247.
    8. Zhang Wei-Bin, 2012. "Education and Human Capital Accumulation in a Two -Sector Growth Model with Elastic Labor Supply," Scientific Annals of Economics and Business, Sciendo, vol. 59(1), pages 289-309, July.
    9. Margit Schratzenstaller-Altzinger & Fanny Dellinger, 2018. "Genderdifferenzierte Lenkungswirkungen des Abgabensystems auf das Arbeitsangebot," WIFO Monatsberichte (monthly reports), WIFO, vol. 91(2), pages 105-120, February.

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    More about this item

    Keywords

    Increasing returns Tax policy Gender Labour supply Education;

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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