Redistributive Taxation in a Simple Life-Cycle Model.

An overlapping-generations model with "rich" and "poor" life-cycle planners is developed. Positive aspects of redistributive capital and labor taxation are then analyzed. The conditions required for Feldstein's result, that the long-run capital-labor ratio is invariant to wage taxations, are discussed. The utility frontier is shown to generally have a slope with an absolute value different from one in the neighborhood of a no-tax equilibrium. Labor income is clearly a more efficient base for long-run redistribution only if the economy is dynamically inefficient and the rich household benefits from an increase in the gross interest rate. Even in this case, the labor-income base may not be considered more desirable when transitional effects are considered. Copyright 1989 by The London School of Economics and Political Science.

The Quantity and Quality of Schooling and U.S. Labor Productivity Growth (1870-2000)

This paper accounts for the contribution of the quantity and quality of schooling to worker productivity growth in the United States from 1870 to 2000. Schooling investments rose dramatically over the period before leveling off around 1970. Schooling likely caused 30 to 40 percent of the fivefold rise in worker productivity from 1870 to 1970 and produced a "wave pattern" in productivity growth (previously attributed solely to the timing and diffusion of important technological innovations). The results suggest that about 1 percent of the century-long 1.6-percent growth rate in worker productivity is sustainable. (Copyright: Elsevier)

Competition and Private School Vouchers

This paper examines the theoretical presumption that private school vouchers will increase the quality of education in public and private schools. Even in simple models that assume public education is plagued by X-inefficiency or budger-maximizing administrators, the effect of vouchers on quality are ambiguous. The primary reason for the ambiguity is that vouchers may reduce the enrollment response to changes in public-school quality by placing different households at the margin of deciding between public and private education. The ambiguity also stems from situations where public cost-cutting responses completely dominate quality responses and where private-school quality falls.

Human Capital and Growth: An Alternative Accounting

This paper re-examines the importance of human capital in explaining economic growth. Previous studies are extended by including schooling investments of both time and goods within the school year, a human capital externality, and imperfect substitution between white collar and manual tasks. The model of worker productivity used to conduct the growth accounting is consistent with (1) rates of return to time and goods investment in education, (2) white collar wage premia, and (3) trendless worker productivity growth rates in the United States over the 20th century. The analysis suggests that about one third of United States growth over this period was related to human capital accumulation, accounting for an average annual growth rate of 0.6 to 0.7 percent. The model also implies that neoclassical inputs can account for 5.5 to 8.5-fold differences in worker productivity across rich and poor countries.