@TechReport{iza:izadps:dp8666,
            	author={Koeniger, Winfried and Prat, Julien},
            	title={Human Capital and Optimal Redistribution},
            	year={2014},
	month={Nov},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={8666},
            	url={https://www.iza.org/index.php/publications/dp8666},
	abstract={We characterize optimal redistribution in a dynastic family model with human capital. We show how a government can improve the trade-off between equality and incentives by changing the amount of observable human capital. We provide an intuitive decomposition for the wedge between human-capital investment in the laissez faire and the social optimum. This wedge differs from the wedge for bequests because human capital carries risk: its returns depend on the non-diversifiable risk of children's ability. Thus, human capital investment is encouraged more than bequests in the social optimum if human capital is a bad hedge for consumption risk.},
	keywords={optimal taxation;human capital},
            }