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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...
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and savings decisions of singles and married couples. Partial insurance against wage and employment shocks is provided by … social programs, savings, and the labor supplies of all adult household members. The optimal policy mix focuses mainly on …
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