This paper considers how optimal education and tax policy depends on the risk properties of human capital. It is … 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 …

We study the joint design of nonlinear income and education taxes when the government pursues redistributive objectives … education. Market remuneration of agents depends on both their innate ability type and their educational choices. Our focus is … on income and education and shed light on the reasons for it and mechanisms through which it is done. We show how and why …

Justification for policies to encourage investments in education, particularly for individuals at the lower end of the … potentially loss averse around their expected outcome make risky investments in education and we draw on optimal tax theory to … preferences, standard risk aversion and labour supply behaviour, (ii) the risk properties of education, and (iii) the degree of …