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Heterogeneous Preferences, Education Expenditures and Income Distribution

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  • BULY A. CARDAK

Abstract

This paper introduces heterogeneous preferences to a growth model which incorporates human capital, accumulated through either public or private education. The implications of heterogeneous preferences for income and its distribution are the focus of the paper. Public education expenditure is determined through a voting mechanism where the median preference rather than median income household is the decisive voter. The paper extends the work of Glomm and Ravikumar (1992) and shows first, that heterogeneous preferences increase income inequality in the private education model and second, public education can overcome the added heterogeneity and reduce income inequality. The results strengthen the arguments for public education as a redistributive mechanism.

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  • Buly A. Cardak, 1999. "Heterogeneous Preferences, Education Expenditures and Income Distribution," The Economic Record, The Economic Society of Australia, vol. 75(1), pages 63-76, March.
    • Handle: RePEc:bla:ecorec:v:75:y:1999:i:1:p:63-76
    DOI: 10.1111/j.1475-4932.1999.tb02434.x
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    References listed on IDEAS

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    1. Salwa TRABELSI, 2017. "Public education expenditure and economic growth: the educational quality threshold effect," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 45, pages 99-112.
    2. Pham, Thi Kim Cuong, 2005. "Economic growth and status-seeking through personal wealth," European Journal of Political Economy, Elsevier, vol. 21(2), pages 407-427, June.
    3. Tamotsu Onozaki, 2018. "Nonlinearity, Bounded Rationality, and Heterogeneity," Springer Books, Springer, number 978-4-431-54971-0, November.
    4. Woode, Maame Esi & Nourry, Carine & Ventelou, Bruno, 2014. "Childhood preventive care, adult healthcare and economic growth: The role of healthcare financing," Economics Letters, Elsevier, vol. 124(1), pages 41-47.
    5. Nikos Benos, 2004. "Education Policies and Economic Growth," University of Cyprus Working Papers in Economics 4-2004, University of Cyprus Department of Economics.
    6. Andrés Rodríguez‐Pose & Vassilis Tselios, 2009. "Education And Income Inequality In The Regions Of The European Union," Journal of Regional Science, Wiley Blackwell, vol. 49(3), pages 411-437, August.
    7. Das, Mausumi, 2007. "Persistent inequality: An explanation based on limited parental altruism," Journal of Development Economics, Elsevier, vol. 84(1), pages 251-270, September.
    8. Burcu Kiran, 2014. "Testing the impact of educational expenditures on economic growth: new evidence from Latin American countries," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(3), pages 1181-1190, May.
    9. John Creedy, 2006. "Education Vouchers: Means Testing Versus Uniformity," Department of Economics - Working Papers Series 978, The University of Melbourne.
    10. Łukasz Jabłoński, 2011. "Kapitał ludzki w wybranych modelach wzrostu gospodarczego," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1-2, pages 81-103.
    11. Onozaki, Tamotsu & Sieg, Gernot & Yokoo, Masanori, 2003. "Stability, chaos and multiple attractors: a single agent makes a difference," Journal of Economic Dynamics and Control, Elsevier, vol. 27(10), pages 1917-1938, August.
    12. Mihai MUTASCU & Nicolae-Bogdan IANC & Albert LESSOUA, 2021. "Public debt and inequality in Sub-Saharan Africa: the case of EMCCA and WAEMU countries," LEO Working Papers / DR LEO 2911, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    13. Nikos Benos, 2010. "Education policy, growth and welfare," Education Economics, Taylor & Francis Journals, vol. 18(1), pages 33-47.
    14. Salwa Trabelsi, 2017. "Mixed, Private And Public Educational Financing Regimes, Economic Growth And Income Inequality," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 62(212), pages 43-62, January -.
    15. John Creedy, 2010. "Education Vouchers and Labour Supply," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 13(2), pages 155-173.
    16. Limor Hatsor, 2014. "Allocation of Resources in Educational Production: The Budget Puzzle," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(6), pages 854-883, December.
    17. Bartak Jakub & Jabłoński Łukasz, 2016. "Human Capital Versus Income Variations: Are They Linked in OECD Countries?," Journal of Management and Business Administration. Central Europe, Sciendo, vol. 24(2), pages 56-73, June.

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