The effects of a tax deduction for lifelong learning expenditures

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 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.