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| Title: | The Impact of Taxes and Transfers on Skill Premium |
| Authors: | Takahashi, Shuhei   Yamada, Ken |
| Keywords: | Skill premium capital-skill complementarity incomplete markets capital income taxation composition effect |
| Issue Date: | Aug-2017 |
| Publisher: | Institute of Economic Research, Kyoto University |
| Journal title: | KIER Discussion Paper |
| Volume: | 976 |
| Start page: | 1 |
| End page: | 36 |
| Abstract: | The level of wage inequality has varied across advanced industrial countries. One of the main reasons has been a significant difference in the skill wage premium. This paper analyzes the impact of taxes and transfers on skill premium and social welfare in a heterogeneous-agents incomplete-markets model, extended to allow for capital-skill complementarity. Our analysis shows that a significant fraction of the difference in the skill wage premium between the United States and Japan can be attributed to the difference in the tax rate on capital income. |
| Description: | Revised: October 2018 |
| URI: | http://hdl.handle.net/2433/228361 |
| Appears in Collections: | KIER Discussion Paper (English) |
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