We propose an innovation-driven growth model in which education is determined by family background and cognitive ability. We show that compulsory schooling can move a society from elite education to mass education, which then triggers market R&D. This means that our model rationalizes two...

Altruistic parents may transfer resources to their offspring by providing education, and by leaving bequests. We show that in the presence of wage taxation, a small bequest tax may improve efficiency in an overlapping-generations framework with only intended bequests, by enhancing incentives of...

I show how the influences of unskilled immigration, differential fertility between immigrants and the local indigenous population, and incentives for investment in human capital combine to predict the decline of the West. In particular, indigenous low-skilled workers lose from unskilled...

In this note, we show that labour market integration can be a double-edged sword. In the presence of local human capital externalities, integration and the ensuing agglomeration of skilled labour can cause a decline in human capital and the total wage sum (net of education costs). In particular,...

This article analyzes the consequences of integration in public education. I show that the flight from the integrated multicultural public schools to private education increases private educational expenditures and, as a result, decreases fertility among more affluent parents whose children...

This work focuses on a temporary guest-worker-type migration of individuals from the middle class of the wealth distribution. The article demonstrates that the possibility of a low-skilled guest-worker employment in a higher wage foreign country lowers the relative attractiveness of the skilled...

This paper investigates how precisely short-term, job-search oriented training programs as opposed to long-term, human capital intensive training programs work. We evaluate and compare their effects on time until job entry, stability of employment, and earnings. Further, we examine the...

We formulate a two-period life-cycle model of saving, labor supply, and human capital investments when individuals differ in ability and initial wealth. Borrowing constraints prevent individuals to optimally smooth consumption over the life-cycle and to optimally invest in human capital. We show...

In this paper we reexamine the Feldstein-Horioka finding of limited international capital mobility by using a broader view (i.e., including human capital) of investment and saving. We find that the Feldstein-Horioka result is impervious to this change

In a model with ex-ante homogenous households, earnings risk and a general earnings function, we derive the optimal linear labor tax rate and optimal linear education subsidies. The optimal income tax trades off social insurance against incentives to work and to invest in human capital....