Optimal Policy and the Risk Properties of Human Capital Reconsidered

By Dan Anderberg. Social Science Research Network, 2009

116 citations recorded by the source corpus.

This paper considers how optimal education and tax policy depends on the risk properties of human capital. It is demonstrated that a key feature of human capital investments is whether they increase or decrease wage risk. In a benchmark model it is shown that this feature alone determines whether a constrained optimal allocation should be characterized by a positive or a negative education premium. In the same model a positive intertemporal wedge is optimal. A set of generalizations, including non-observability of education, non-observability of consumption, and temporal resolution of uncertainty, are then considered to examine the robustness of these results.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/24988657b10d07458491e63caefbb94b6d23d467

Citations in the corpus

• Optimal Taxation and Human Capital Policies over the Life Cycle (2014, unknown): “Previous dynamic models allowed for heterogeneity across agents, but not uncertainty (Bohacek and Kapicka, 2008; Kapicka, 2013a), or uncertainty, but not heterogeneity (Anderberg, 2009; Grochulski and Piskorski, 2010), which precludes a discussion of redistributive policies. Findeisen and Sachs (201”