We specify and estimate a life-cycle labour supply model that expands on earlier work by simultaneously including human capital accumulation, saving and bequests, an active extensive margin, a realistic specification of the progressive tax structure and the Social Security system, and an accounting for private pensions and health expenditures. By incorporating all these features, we develop new...

In this paper we characterize, both theoretically and quantiatively, the optimal mix of progressive income taxes and education subsidies in a model with endogeous human capital formation, borrowing constraints and income risk.

The traditional view that excise taxes are regressive has been challenged. I document the history of the term regressive tax, show that traditional definitions have always found cigarette taxes to be regressive, and illustrate the implications of the greater price responsiveness observed among the poor. I explain the different definitions of tax burden: accounting, welfare-based willingness to ...