Tax Policy and Human Capital Formation / James J. Heckman, Lance Lochner, Christopher Taber.

Format:

Book

Author/Creator:

Heckman, James J.

Contributor:

National Bureau of Economic Research.

Lochner, Lance.

Taber, Christopher.

Series:

Working Paper Series (National Bureau of Economic Research) no. w6462.

NBER working paper series no. w6462

Language:

English

Subjects (All):

Spendings tax--United States.

Spendings tax.

Progressive taxation--United States--Econometric models.

Progressive taxation.

Human capital--Econometric models.

Human capital.

Labor market--United States--Econometric models.

Labor market.

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1998.

Cambridge, MA : National Bureau of Economic Research, 1998.

Summary:

Missing from recent discussions of tax reform is any systematic analysis of the effects of various tax proposals on skill formation. This gap in the literature in empirical public finance is due to the absence of any empirically based general equilibrium models with both human capital formation and physical capital formation that are consistent with observations on modern labor markets. This paper is a progress report on our ongoing research on formulating and estimating dynamic general equilibrium models with endogenous heterogeneous human capital accumulation. Our model explains many features of rising wage inequality in the U.S. economy (James Heckman, Lance Lochner and Christopher Taber, 1998). In this paper, we use our model to study the impacts on skill formation of proposals to switch from progressive taxes to flat income and consumption taxes. For the sake of brevity, we focus on steady states in this paper, although we study both transitions and steady states in our research.

Notes:

Print version record

March 1998.