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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...
Persistent link: https://www.econbiz.de/10013133620
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,...
Persistent link: https://www.econbiz.de/10013137447
among more affluent parents whose children flee. In contrast, among less prosperous parents, integration in public education …
Persistent link: https://www.econbiz.de/10013121202
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...
Persistent link: https://www.econbiz.de/10013125698
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...
Persistent link: https://www.econbiz.de/10013084907
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....
Persistent link: https://www.econbiz.de/10012765194
This paper considers how optimal education and tax policy depends on the risk properties of human capital. It is demonstrated that a key feature of human capital investments is whether they increase or decrease wage risk. In a benchmark model it is shown that this feature alone determines...
Persistent link: https://www.econbiz.de/10012768814
, this setup highlights another externality source. This is due to the effect of a parent’s choice of number and educational …) Investments in education of high- and low-ability parents must be subsidized, (ii) direct child subsidies to one or both parent … subsidies) to high-ability parents are always positive, and to low-ability parents can be positive or negative, (iv) either …
Persistent link: https://www.econbiz.de/10013316338
This paper explores how the specification of the earnings function impacts the optimal tax treatment of human capital. If education is complementary to labor effort, education should be subsidized to offset tax distortions on labor supply. However, if most of the education is enjoyed by high...
Persistent link: https://www.econbiz.de/10013316559
A strictly risk-averse individual with an exogenous gross income in period one can acquire human capital in the same period and evade taxes. Period-two income rises with educational investments in period one and can also be hidden from tax authorities. It is shown that a greater tax...
Persistent link: https://www.econbiz.de/10013111366