Economics, Econometrics and Finance
4 years ago

Optimal tax policy boosts low-income children's economic mobility by 1.75%

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National Bureau of Economic Research
Equalizing Outcomes and Equalizing Opportunities: Optimal Taxation when Children's Abilities Depend on Parents' Resources
Alexander Gelber, Matthew Weinzierl

Paper Summary

Parents' money affects how well their kids do in the future. To make things fair, taxes should help level the playing field. By studying this, researchers found that the best tax policy should give more help to low-income families. This would increase the chances of poor kids moving up in society, leading to a significant welfare gain.

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