The effects of a tax deduction for lifelong learning expenditures
van den Berge, Wiljan; Jongen, Egbert; van der Wiel, Karen
(2023) International Tax and Public Finance, volume 30, issue 3, pp.
(Article)
Abstract
We study the effects of a tax deduction for lifelong learning, exploiting exogenous variation in the effective costs of lifelong learning due to jumps in tax bracket rates. We use a regression kink design and tax return data on the universe of Dutch taxpayers. Low-income individuals show no response, but
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high-income individuals are more likely to report lifelong learning expenditures (though not a higher amount) when net costs are lower. Furthermore, for high-income individuals the effect peaks at the age interval 40–45 years of age.
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Keywords: Lifelong learning, Regression kink design, Tax deduction, Accounting, Finance, Economics and Econometrics
ISSN: 0927-5940
Publisher: Springer
Note: Funding Information: We thank the editor David Agrawal, two anonymous referees and Simon Jäger, Pierre Koning, Hessel Oosterbeek, Ted Reininga, Daniël van Vuuren and seminar and congress participants at Bentley College, Boston University, CPB Netherlands Bureau for Economic Policy Analysis, the Dutch Ministry of Education, Statistics Norway, Tilburg University, and NED, ESPE, IIPF and EALE conferences for invaluable comments and suggestions. Remaining errors are our own. We are grateful to the Dutch Ministry of Social Affairs, the Ministry of Finance and the Ministry of Education, Culture and Science for funding this research. Funding Information: Van den Berge gratefully acknowledges funding from Foundation Instituut Gak. Funding Information: We thank the editor David Agrawal, two anonymous referees and Simon Jäger, Pierre Koning, Hessel Oosterbeek, Ted Reininga, Daniël van Vuuren and seminar and congress participants at Bentley College, Boston University, CPB Netherlands Bureau for Economic Policy Analysis, the Dutch Ministry of Education, Statistics Norway, Tilburg University, and NED, ESPE, IIPF and EALE conferences for invaluable comments and suggestions. Remaining errors are our own. We are grateful to the Dutch Ministry of Social Affairs, the Ministry of Finance and the Ministry of Education, Culture and Science for funding this research. Publisher Copyright: © 2022, The Author(s).
(Peer reviewed)
