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Standards, Inequality in Education and Efficiency

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  • Sevket Alper Koc

    (Kocaeli University, Department of Economics)

  • Hakki Cenk Erkin

    (Kocaeli University, Department of Economics)

Abstract

We develop a model of educational standards that includes inequality in educational opportunities. Our model shows that policymakers setting an output maximizing standard need to consider structural factors such as inequality of income and opportunity, skill mismatch in the economy, profit and wage shares and labor market imperfections. High standards are not optimal under severe educational inequality; they lead to lower output when many cannot access quality education. Optimal standard rises along with increasing opportunities for poor students. Targeted subsidies enhance both distributional and efficiency-related objectives. Other effective policies to extend skilled labor and to improve poor workers income are remedying information problems between employers and workers and distributing more of output gains toward labor.

Suggested Citation

  • Sevket Alper Koc & Hakki Cenk Erkin, 2015. "Standards, Inequality in Education and Efficiency," World Journal of Applied Economics, WERI-World Economic Research Institute, vol. 1(1), pages 21-43, June.
    • Handle: RePEc:ana:journl:v:1:y:2015:i:1:p:21-43
    DOI: 10.22440/EconWorld.J.2015.1.1.SK.0004
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    References listed on IDEAS

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    More about this item

    Keywords

    Education and Inequality; Government Policy; Human Capital; skills; Occupational Choice; Labor Productivity;
    All these keywords.

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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