Full Citation
Title: Three Essays on Human Capital and the Distribution of Income
Citation Type: Dissertation/Thesis
Publication Year: 2018
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Abstract: This dissertation exams topics on the human capital and the distribution of income. The first chapter investigates the insurance value of progressive taxation with heterogeneous risk aversion. The Investment in human capital is lower when the returns to it are subject to unin-surable risk. Progressive income taxation offers a degree of insurance against such risk. Offsetting this effect are the two well-known distortions imposed by progressive taxation: lower expected net-of-tax returns to human-capital acquisition and distortion of the labor-supply decision. The net efficiency effect of progressive income taxation is therefore ambiguous, but there is a presumption that some degree of progressivity can be welfare-improving for risk-averse individuals. To derive the degree of progressivity that may be desirable on efficiency grounds, I construct a general-equilibrium model of an economy with two sectors, calibrated to approximate the U.S. labor market, that differ in terms of the productivity of human capital and the variability of lifetime earnings. Individuals, who differ only in terms of their risk aversion, sort themselves into the two sectors. The simple version of this model, which ignores the labor-leisure choice, suggests that a relatively high degree of income-tax progressivity maximizes aggregate welfare as measured by workers willingness to pay for the insurance being provided. When each workers supply of labor is allowed to vary in response to marginal tax rates, the efficient degree of progressivity is similar to that of the U.S. tax code. The second chapter exams the worker quality and education premium in the United States. The education premium in the U.S. has been increasing since the 1980s, but the rate of increase has slowed. One explanation for the slowdown is the decrease in the quality of workers who attended some college relative to the quality of workers who obtained a high school diploma. This paper develops a measure of worker quality to estimate the impact of college and high school graduates quality on wages and the education premium. The measure of worker quality uses a weighted average of an . . .
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Authors: Zhao, Zhiqi
Institution: Clemson University
Department: Economic
Advisor: William R. Dougan
Degree: Ph.D
Publisher Location: Clemson, South Carolina
Pages: 72
Data Collections: IPUMS USA, IPUMS CPS
Topics: Labor Force and Occupational Structure, Other
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