Bovenberg and Jacobs (2005) and Richter (2009) derive the education efficiency theorem: In a second-best optimum, the education decision is undistorted if the function expressing the stock of human capital features a constant elasticity with respect to education. I drop this assumption. The...

Labour supply is determined by two factors: the participation of workers in the labour market (extensive margin), and the number of hours supplied by those working (intensive margin). Based on the European Union Labour Force Survey (EU-LFS), we analyze which margin is more decisive in...