. Real options may help to explain a larger human capital premium for higher education, smaller responsiveness of higher … education investments to financial incentives, and larger sensitivity of higher education to low-return outcomes and human … standard human capital model. A flat income tax remains neutral if education expenditures are fully deductible. …

contributes to redistribution. Simulations show that the top rate and marginal education subsidies are close to zero for a wide …Should a redistributive government optimally subsidize education to provoke a reduction in the skill premium through … income taxes and education subsidies in two-type models with endogenous human capital formation, endogenous labor supply, and …

endogenous retirement. Labor taxation distorts not only labor supply, but also education and retirement decisions. Actuarially … unfair pensions further exacerbate labor tax distortions on retirement. Education subsidies can nevertheless cushion the … adverse impact of taxation on skill formation. Feedbacks between education, labor supply, and retirement are important. The …

. 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 ability households, education should be taxed in order to redistribute … resources to the poor. The paper identifies the exact conditions under which these two effects cancel and education should be …

redistribution might be supported by either a constitution, or some kind of voting equilibrium. …