Essays on fiscal policy, growth and the importance of family altruism

Abstract: This thesis consists of three self-contained essays.ESSAY I The Swedish tax system of 1991 and its effects on welfare and economic growth are analysed within two different, commonly used growth models. Not surprisingly, the results turn out to be fairly sensitive to the model structure. In neoclassical framework, elastic labour supply makes current taxes three times as harmful as when labour supply is fixed. In a model where thformation of human capital drives economic growth, the welfare distortions from the Swedish tax system are even larger. Moreover, the tax system distorts the educational choice, and thereby long-rueconomic growth. In addition, the different models predict very different marginal effects from different kinds of taxation.  ESSAY II The potential importance of the precautionary savings motive has been noted in many studies during the last decades. This essay analyses what importance marriage may have to the precautionary savings motive. Marriage admits a kind of insuranc since spouses can share risk. I show that altruism per se can induce time consistent intra-family risk sharing. However, this rissharing is not likely to be ex ante efficient. But the more altruistic the couple is, the closer is the solution to the efficient one. Also welfare and savings effects from social insurance turn out tbe sensitive to assumptions about family structure. For risk sharing couples, a compulsory social insurance scheme may have much smaller effects on welfare and precautionary savings, than it has r singles. ESSAY III This essay deals in a theoretic way with human-capital accumulation where parental, as well as public, investments are essential. I study how different policies influence rich and poor parents, respectively, when they make educational decisions. Rich parents allocate resources efficiently between physical requests and educational investments, while poor parents can only afford to invest in children's human capital. Therefore, it turns out that educational equality between rich and poor children is not necessarily promoted by further investments in public schoolin Moreover, I show that educational investments in low-skilled parents may have substantial spill-over effects on their children. Tax policy may also be used to influence human-capital accumulation, and I derive results showing how different taxes affect the educational gap between rich and poor children.