We estimate a standard human capital earnings model, augmented to allow for different firm-specific wage premia. The earnings of an individual depend on her human capital bundle and the earnings mark-up of the firm she is currently working for. We use linked employer-employee data from Norway...

In a model of endogenous choice of location and endogenous aversion against inequality, we demonstrate that large pre-tax difference in income may lead to a residential segregation of rich and poor. Such segregation may reduce the social attachment between the groups in society, and reduce the...

The present paper expands this model by including the intrinsic value of education as a motivation behind getting education. I find that the argument in favour of dual income taxation is strengthened. A comprehensive proportional income tax works as a tax subsidy on human capital investments,...