Are Higher Education Subsidies Second Best?
18 Pages Posted: 18 May 2004
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.
Suggested Citation: Suggested Citation