Investing in children's human capital is one of the most critical investments a country can make to break the cycle of poverty and reap the demographic dividend. It can support the productivity and competitiveness of the future workforce and thus affect the growth trajectory of the country....

To analyze the optimal social insurance package, we set up a two-period life-cycle model with risky human capital investment in which the government has access to labor taxation, education subsidies, and capital taxation. Social insurance is provided by redistributive labor taxation. We point...