TY  - RPRT
        AU  - Richter, Wolfram F.
        TI  - Efficient Tax Policy Ranks Education Higher Than Saving
        PY  - 2008/Apr/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 3451
        UR  - https://www.iza.org/publications/dp3451
        AB  - Assuming a two-period model with endogenous choices of labour, education, and saving, it is shown to be second-best efficient not to distort the choice of education. In general this implies distorting the saving decision. Hence a strict order of policy priority is derived. Efficient tax policy ranks education higher than saving. The result assumes an isoelastic earnings function and holds else for arbitrary utility functions. Isoelasticity of earnings is justified with reference to the empirically well-founded Power Law of Learning.
        KW  - efficient taxation of human and nonhuman capital investment
KW  - labour and saving
KW  - endogenous choice of education
KW  - power law of learning
        ER  -