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Title: Labour Income Taxation, Human Capital and Growth: The Role of Child Care

Author(s): Alessandra Casarico and Alessandro Sommacal

Publication Date: November 2008

Keyword(s): child care, growth, human capital, labour supply and taxation

Programme Area(s): Public Economics

Abstract: This paper studies the effects of labour income taxation on growth in an OLG model where both formal schooling and child care enter the human capital production function as complements. We compare them with the effects obtained in a model where only formal schooling matters for skill formation. Using a numerical analysis we find that the omission of child care from the technology of skills' formation can significantly bias the results related to the effects of labour income taxation on growth.

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Bibliographic Reference

Casarico, A and Sommacal, A. 2008. 'Labour Income Taxation, Human Capital and Growth: The Role of Child Care'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=7039