The RFBerlin Applied Economics Seminar series brings leading researchers to Berlin to share their latest work and engage with our community. We are pleased to welcome Michael Keane for this session, where he will share his work.
Michael Keane is the Wm. Polk Carey Distinguished Professor at Johns Hopkins Carey Business School. A leading expert on choice modelling – the mathematical modelling of consumer choice behaviour – and on life-cycle modelling, he has published over 100 papers in top economics and marketing journals. His applied work spans a wide range of fields, including health economics, the economics of education, child development, forecasting, industrial organization, international trade, and transition economies. In labour economics, he has developed rich life-cycle models that incorporate a complex array of choices, including education, labour supply, marriage, and fertility.
Event Topic: Human Capital and Optimal Taxation
We study how endogenous human capital changes optimal taxation in a rich overlapping-generations general equilibrium model. We compare otherwise similar economies with exogenous and endogenous human capital, calibrating each to life cycle patterns of wages, hours, employment, assets, and wage dispersion. When the consumption tax is held fixed, our endogenous human capital model implies a flat optimal labor-income tax and a positive capital-income tax across a wide range of preference parameters. Thus, endogenous human capital weakens the case for progressive labor-income taxation, while strengthening the case for positive capital income taxation. However, when consumption taxation is also optimized, the optimal tax rates on both capital and labor are zero. A revenue-neutral replacement of the broad income tax with a consumption tax generates large welfare gains in both economies, but the gains are much larger when human capital is endogenous because the income tax distorts human capital investment.
Event Details:
Date: 27 October 2026
Time: 14:00–15:15
Participation: the seminar is open to the public and targeted to an academic audience.
If you have any questions or need further information, feel free to contact us using the form or email us at [email protected]
