Taxes, Tuition Fees and Education for Pleasure

Søren Bo Nielsen, Jan Rose Skaksen, Nikolaj Malchow-Møller

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

The fact that education provides both a productive and a consumptive (nonproductive) return has important and, in some cases, dramatic implications for optimal taxes and tuition fees. Using a simple model, we show that when the consumption share in education is endogenous and tuition fees are unconstrained, the optimal tax/fee system involves regressive income taxes and high tuition fees. A progressive labor income tax system may, on the other hand, be a second-best response to politically constrained, low tuition fees. Finally, the existence of individuals with different abilities will also move the optimal income tax system toward progressivity.
Original languageEnglish
JournalJournal of Public Economic Theory
Volume13
Issue number2
Pages (from-to)189-215
ISSN1097-3923
DOIs
Publication statusPublished - Apr 2011

Cite this

Nielsen, Søren Bo ; Rose Skaksen, Jan ; Malchow-Møller, Nikolaj. / Taxes, Tuition Fees and Education for Pleasure. In: Journal of Public Economic Theory. 2011 ; Vol. 13, No. 2. pp. 189-215.
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Nielsen, SB, Rose Skaksen, J & Malchow-Møller, N 2011, 'Taxes, Tuition Fees and Education for Pleasure', Journal of Public Economic Theory, vol. 13, no. 2, pp. 189-215. https://doi.org/10.1111/j.1467-9779.2011.01498.x

Taxes, Tuition Fees and Education for Pleasure. / Nielsen, Søren Bo; Rose Skaksen, Jan; Malchow-Møller, Nikolaj.

In: Journal of Public Economic Theory, Vol. 13, No. 2, 04.2011, p. 189-215.

Research output: Contribution to journalJournal articleResearchpeer-review

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