Efficient education policy: A second-order elasticity rule

Research, Preprint English OPEN
Wolfram F. Richter;
  • Publisher: Center for Economic Studies and Ifo Institute (CESifo) Munich
  • Subject: H21 | Subvention | Einkommensfunktion | J24 | labour, and saving | Inverse Elasticity Rule | I28 | Optimale Besteuerung | endogenous choice of education, second-best efficient taxation, linear instruments, finite periods, Ramsey’s Rule, inverse elasticity rule | Elastizität | endogenous choice of education | finite periods | Bildungsverhalten | linear instruments | Ramsey's Rule | Bildungspolitik | Theorie | second-best efficient taxation
    • jel: jel:H21 | jel:J24 | jel:I28
      ddc: ddc:330

Assuming a two-period model with endogenous choices of labour, education, and saving, efficient education policy is characterized for a Ramsey-like scenario in which the government is constrained to use linear instruments. It is shown that education should be effectivel... View more
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