A BEJEAP Contributions article.

Abstract

Recently, researchers have started to re-examine the so-called Atkinson-Stiglitz theorem on optimal commodity taxation. The essence of such research is to examine whether or not it is optimal to distort markets other than the labor market for achieving the second-best resource allocation. I examine this theorem by introducing the comparative advantage of human capital accumulation. More specifically, I assume that people with high ability obtain a higher return from skilled human capital accumulation than people with low ability. I explore the implication of this comparative advantage of human capital accumulation for the Atkinson-Stiglitz theorem on optimal commodity taxation.

Submitted: October 11, 2005 · Accepted: May 7, 2007 · Published: September 10, 2007

Recommended Citation

Naito, Hisahiro (2007) "Atkinson-Stiglitz Theorem with Endogenous Human Capital Accumulation," The B.E. Journal of Economic Analysis & Policy: Vol. 7 : Iss. 1 (Contributions), Article 46.
Available at: http://www.bepress.com/bejeap/vol7/iss1/art46

Related Files

appendices.pdf (138 kB)
appendices for the paper