Documentos de trabajo
The risk-properties of human capital and the design of government policies
Fecha
2004-07-01Registro en:
0104-8910
Autor
Costa, Carlos Eugênio da
Maestri, Lucas Jóver
Institución
Resumen
Whether human capital increases or decreases wage uncertainty is an open question from an empirical standpoint. Yet, most policy prescriptions regarding human capital formation are based on models that impose riskiness on this type of investment. In a two period and finite type optimal income taxation problem we derive prescriptions that are robust to the risk characteristics of human capital: savings should be discouraged, human capital investments encouraged and both types of investment driven to an efficient level from an aggregate perspective. These prescriptions are also robust to the assumptions regarding what choices are observed, despite policy instruments being not.