Money or Joy: The Choice of Educational Type

Annette Alstadsæter; Anne-Sofie Kolm; Birthe Larsen

Money or Joy: The Choice of Educational Type

Annette Alstadsæter, Anne-Sofie Kolm, Birthe Larsen

Department of Economics

Research output: Working paper › Research

135 Downloads (Pure)

Abstract

This paper examines the effect of taxes on the individuals' choices of educational direction, and thus on the economy.s skill composition. A proportional labour tax induces too many workers with high innate ability to choose an educational type associated with high consumption value and low effort. This increases the skill mismatch and aggregate unemployment in the economy. The government can correct for this distortion by use of differentiated tuition fees or tax rates.JEL codes: J64, J68, H21, H24Keywords: Unemployment, matching, education, optimal taxation, tuition fees

Original language	English
Place of Publication	København
Number of pages	25
Publication status	Published - 2005

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

Access to Document

wp23-2005Final published version, 203 KBLicence: CC BY-NC-ND

Handle.net

Persistent link

Cite this

@techreport{c7ffc970c01f11db9769000ea68e967b,

title = "Money or Joy: The Choice of Educational Type",

abstract = "This paper examines the effect of taxes on the individuals' choices of educational direction, and thus on the economy.s skill composition. A proportional labour tax induces too many workers with high innate ability to choose an educational type associated with high consumption value and low effort. This increases the skill mismatch and aggregate unemployment in the economy. The government can correct for this distortion by use of differentiated tuition fees or tax rates.JEL codes: J64, J68, H21, H24Keywords: Unemployment, matching, education, optimal taxation, tuition fees",

keywords = "Uddannelse, Livsindkomst, Skattetryk, Uddannelsesvalg, Payoff",

author = "Annette Alstads{\ae}ter and Anne-Sofie Kolm and Birthe Larsen",

year = "2005",

language = "English",

type = "WorkingPaper",

}

TY - UNPB

T1 - Money or Joy

T2 - The Choice of Educational Type

AU - Alstadsæter, Annette

AU - Kolm, Anne-Sofie

AU - Larsen, Birthe

PY - 2005

Y1 - 2005

N2 - This paper examines the effect of taxes on the individuals' choices of educational direction, and thus on the economy.s skill composition. A proportional labour tax induces too many workers with high innate ability to choose an educational type associated with high consumption value and low effort. This increases the skill mismatch and aggregate unemployment in the economy. The government can correct for this distortion by use of differentiated tuition fees or tax rates.JEL codes: J64, J68, H21, H24Keywords: Unemployment, matching, education, optimal taxation, tuition fees

AB - This paper examines the effect of taxes on the individuals' choices of educational direction, and thus on the economy.s skill composition. A proportional labour tax induces too many workers with high innate ability to choose an educational type associated with high consumption value and low effort. This increases the skill mismatch and aggregate unemployment in the economy. The government can correct for this distortion by use of differentiated tuition fees or tax rates.JEL codes: J64, J68, H21, H24Keywords: Unemployment, matching, education, optimal taxation, tuition fees

KW - Uddannelse

KW - Livsindkomst

KW - Skattetryk

KW - Uddannelsesvalg

KW - Payoff

M3 - Working paper

BT - Money or Joy

CY - København

ER -