Dur, Robert A.J.; Teulings, Coen N. - Tinbergen Instituut - 2003
We argue that promoting education may be a means to reduceincome inequality. When workers of different skill levels … areimperfect substitutes in production, an increase in the level ofhuman capital in the economy reduces the return to education … atrade-off between the distortions of taxes on effort and the distortionsof education subsidies on the investment in human …