In this paper, we argue that the case for universal compulsory education for sub-Saharan Africa might have been overstated. We capture the African situation through a heterogeneous-agent model, in which high costs of education relative to income and the skill premium cause the economy to...

In this paper, we use a general equilibrium model of endogenous growth in which there is heterogeneity in skill, income, and tax rates to evaluate the effect of progressivity of taxes on growth and welfare. In this framework, changes in the progressivity of tax rates can have positive growth...

This paper analyzes the quantitative role of idiosyncratic uncertainty in an economy in which rational agents vote on hypothetical social security reforms. We find that the role of a pay-as-you-go social security system as a partial insurance and redistribution device significantly reduces...