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Going for growth: overeducation in a tax competition game

Johnes, G (2002) Going for growth: overeducation in a tax competition game. Working Paper. The Department of Economics, Lancaster University.

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    Abstract

    A model of international tax competition is developed in which taxes are raised in order to finance education which in turn raises income. It is shown that, in contrast to results from the tax competition literature, the outcome of a non-cooperative game can be to raise the tax rate, with the result that investment in education exceeds that which is globally socially optimal. This provides an explanation for the tendency for countries to emphasise growth as an objective in spite of what empirical studies tell us about the impact of income on happiness; it also identifies a new type of overeducation.

    Item Type: Monograph (Working Paper)
    Uncontrolled Keywords: growth ; overeducation ; tax competition ; income distribution ; international social welfare function
    Subjects:
    Departments: Lancaster University Management School > Economics
    ID Code: 48550
    Deposited By: ep_importer_pure
    Deposited On: 11 Jul 2011 21:59
    Refereed?: No
    Published?: Published
    Last Modified: 27 Jul 2012 01:09
    Identification Number:
    URI: http://eprints.lancs.ac.uk/id/eprint/48550

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