Taxation and Education Investment in the Tertiary Sector

WZB Markets and Political Economy Working Paper No. FS IV 02 – 17

25 Pages Posted: 22 Aug 2011

See all articles by Fredrik Andersson

Fredrik Andersson

Lund University - Department of Economics

Kai A. Konrad

Max Planck Institute for Tax Law and Public Finance; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); IZA Institute of Labor Economics

Date Written: October 1, 2002

Abstract

In this paper we briefly report some key data on educational expenditure and output in OECD countries and then turn to the motivations for public education. Public education can be important for equal opportunities and has a number of redistributional aspects within and between generations. We further discuss possible externalities of education, the issue of intersectoral investment neutrality and a fundamental time consistency problem of optimal taxation that may make public expenditure on tertiary education desirable from an efficiency point of view. Further we discuss whether and how globalization changes the picture. Mobility changes the analysis of optimal taxation and may make public expenditure less important. We also emphasize insurance aspects and the role of mobility differences.

Keywords: Taxation, education, human capital investment

JEL Classification: H21, H23

Suggested Citation

Andersson, Fredrik and Konrad, Kai A., Taxation and Education Investment in the Tertiary Sector (October 1, 2002). WZB Markets and Political Economy Working Paper No. FS IV 02 – 17, Available at SSRN: https://ssrn.com/abstract=1914369 or http://dx.doi.org/10.2139/ssrn.1914369

Fredrik Andersson

Lund University - Department of Economics ( email )

P.O. Box 7082
S-220 07 Lund
Sweden
+46 46 222 8676 (Phone)
+46 46 222 4118 (Fax)

Kai A. Konrad (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

HOME PAGE: http://www.tax.mpg.de/en/pub/home.cfm

Centre for Economic Policy Research (CEPR)

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United Kingdom

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

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Munich, 81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, 53072
Germany

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