Catalysts for social insurance. Education subsidies vs. real capital taxation.

Autor/inn/en	Schindler, Dirk; Yang, Hongyan
Titel	Catalysts for social insurance. Education subsidies vs. real capital taxation.
Quelle	München: CESifo (2010), 25 S., 238 KB PDF als Volltext kostenfreie Datei (1); PDF als Volltext kostenfreie Datei (2); PDF als Volltext kostenfreie Datei (3) Link als defekt meldenVerfügbarkeit
Reihe	CESifo working paper. 3278. Public Finance
Sprache	englisch
Dokumenttyp	online; Monographie; Graue Literatur
Schlagwörter	Finanzierung; Investition; Lohnsteuer; Sozialversicherung; Theorie; Bildungsinvestition; Sozialversicherung; Bildungsinvestition; Finanzierung; Investition; Kapitalertragssteuer; Lohnsteuer; Subventionierung; Arbeitspapier; Theorie
Abstract	To analyze the optimal social insurance package, we set up a two-period life-cycle model with risky human capital investment in which the government has access to labor taxation, education subsidies and capital taxation. Social insurance is provided by redistributive labor taxation. Moreover, both education subsidies and capital taxation are used as catalysts to facilitate social insurance by mitigating distortions from labor taxation. We derive a Ramsey-rule for the optimal combination of these two instruments. Relative to capital taxation, optimal education subsidies increase with their relative effectiveness to boost labor supply and with households' underinvestment into education, but they decrease with their relative net distortions. For the optimal absolute levels, indirect complementarity effects (i.e., influencing the effectiveness of the other instrument) do matter. Generally, a decrease in capital taxes should be accompanied by an increase in education subsidies.
Erfasst von	ZBW - Leibniz-Informationszentrum Wirtschaft, Kiel
Update	2011/4