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A Cautionary Discussion about Relying on Human Capital Policy to Meet Redistributive Goals

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Author Info
David A. Green

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Abstract

Human capital policy has come to be seen as something of a panacea: acting both as a necessary input for modern growth and an effective tool for redistribution. Canada has moved strongly in the direction of linking redistribution and human capital investment. In this paper, I investigate the empirical evidence and theoretical arguments behind the claim that increasing skills investment opportunities and tying transfers to human capital investments while decreasing traditional income support will ultimately lead to a more equal, more just society. Whether this is true, of course, will depend on the notion of justice one adopts. One of my goals in this paper is to examine the implications of the kind of policy path Canada is following under different notions of fairness. I conclude that both empirical evidence and fairness considerations indicate that human capital policy does not make good redistributive policy.

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Publisher Info
Article provided by University of Toronto Press in its journal Canadian Public Policy.

Volume (Year): 33 (2007)
Issue (Month): 4 (December)
Pages: 397-418
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Handle: RePEc:cpp:issued:v:33:y:2007:i:4:p:397-418

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References listed on IDEAS
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  1. Ralph Stinebrickner & Todd R. Stinebrickner, 2003. "Understanding Educational Outcomes of Students from Low-Income Families: Evidence from a Liberal Arts College with a Full Tuition Subsidy Program," Journal of Human Resources, University of Wisconsin Press, vol. 38(3). [Downloadable!] (restricted)
    Other versions:
  2. Zhao, John & Corak, Miles & Lipps, Garth, 2003. "Family Income and Participation in Post-secondary Education," Analytical Studies Branch Research Paper Series 2003210e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
    Other versions:
  3. Kelly Bedard, 2001. "Human Capital versus Signaling Models: University Access and High School Dropouts," Journal of Political Economy, University of Chicago Press, vol. 109(4), pages 749-775, August. [Downloadable!] (restricted)
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  4. Emmanuel Saez & Michael R. Veall, 2005. "The Evolution of High Incomes in Northern America: Lessons from Canadian Evidence," American Economic Review, American Economic Association, vol. 95(3), pages 831-849, June. [Downloadable!]
  5. Paul Willen & Igal Hendel & Joel Shapiro, 2004. "Educational Opportunity and Income Inequality," NBER Working Papers 10879, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Paul Beaudry & David Green, 1998. "What is Driving US and Canadian Wages: Exogenous Technical Change or Endogenous Choice of Technique?," NBER Working Papers 6853, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Kevin M. Murphy & W. Craig Riddell & Paul M. Romer, 1998. "Wages, Skills, and Technology in the United States and Canada," NBER Working Papers 6638, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Davies, James B & Wooton, Ian, 1992. "Income Inequality and International Migration," Economic Journal, Royal Economic Society, vol. 102(413), pages 789-802, July. [Downloadable!] (restricted)
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  9. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier. [Downloadable!] (restricted)
  10. Kevin Milligan & Enrico Moretti & Philip Oreopoulos, 2003. "Does Education Improve Citizenship? Evidence from the U.S. and the U.K," NBER Working Papers 9584, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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