Labour Income Taxation, Human Capital and Growth: The Role of Child Care

27 Pages Posted: 18 Dec 2008

See all articles by Alessandra Casarico

Alessandra Casarico

Bocconi University - Department of Policy Analysis and Public Management; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Alessandro Sommacal

Universite Catholique de Louvain - Institut de Recherches Economiques et Sociales (IRES)

Date Written: November 2008

Abstract

This paper studies the effects of labour income taxation on growth in an OLG model where both formal schooling and child care enter the human capital production function as complements. We compare them with the effects obtained in a model where only formal schooling matters for skill formation. Using a numerical analysis we find that the omission of child care from the technology of skills' formation can significantly bias the results related to the effects of labour income taxation on growth.

Keywords: child care, growth, human capital, labour supply, taxation

JEL Classification: H31, J22

Suggested Citation

Casarico, Alessandra and Sommacal, Alessandro, Labour Income Taxation, Human Capital and Growth: The Role of Child Care (November 2008). CEPR Discussion Paper No. DP7039. Available at SSRN: https://ssrn.com/abstract=1311163

Alessandra Casarico (Contact Author)

Bocconi University - Department of Policy Analysis and Public Management ( email )

Via Roentgen 1
Milan, 20136
Italy

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

Alessandro Sommacal

Universite Catholique de Louvain - Institut de Recherches Economiques et Sociales (IRES) ( email )

3, Place Montesquieu
1348 Louvain-la-Neuve
Belgium

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