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Are Higher Education Subsidies Second Best?
Author(s) -
Wigger Berthold U.
Publication year - 2004
Publication title -
scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/j.0347-0520.2004.t01-1-00348.x
Subject(s) - subsidy , economics , investment (military) , welfare , social welfare , public economics , labour economics , population , microeconomics , market economy , demography , sociology , politics , political science , law
An optimal taxation framework is considered in which part of the population can take advantage of investment in higher education. It is shown that social welfare can sometimes be increased by supplementing linear income taxes with a subsidy to material investment in higher education, but that social welfare can never be increased by supplementing a non‐linear income tax with such a subsidy.