We analyze optimal taxation of labor and capital income in a life-cycle framework with idiosyncratic income risk. We … provide a novel decomposition of labor income tax formulas into a redistribution and an insurance component. The latter is … independent of the social welfare function and determined by the degree of income risk and risk aversion. The optimal linear …

We characterize intergenerational mobility in Germany using census data on educational attainment and parental income … for 526,000 children. Our measure of educational attainment is the A-Level degree, a requirement for access to university …. A 10 percentile increase in the parental income rank is associated with a 5.2 percentage point increase in the A …