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Education Vouchers, Growth, And Income Inequality

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  • CARDAK, BULY A.

Abstract

This paper studies a growth model with public and private education alternatives. The impact of education vouchers on economic growth and the evolution of income inequality are considered. Results indicate that introducing education vouchers can increase economic growth. Households switching from public to private education experience higher incomes. This raises the tax base, in turn raising public education expenditures and growth of the whole economy. Vouchers are found to generally increase income inequality. Welfare comparisons show that voucher schemes may in some cases gain majority support, depending on assumptions and parameters. The results add a new dimension on which vouchers can be evaluated in the continuing policy debate.

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Bibliographic Info

Article provided by Cambridge University Press in its journal Macroeconomic Dynamics.

Volume (Year): 9 (2005)
Issue (Month): 01 (February)
Pages: 98-121

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Handle: RePEc:cup:macdyn:v:9:y:2005:i:01:p:98-121_04

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  1. Hoyt, William H. & Lee, Kangoh, 1998. "Educational vouchers, welfare effects, and voting," Journal of Public Economics, Elsevier, vol. 69(2), pages 211-228, June.
  2. Oded Galor & Joseph Zeira, 2013. "Income Distribution and Macroeconomics," Working Papers 2013-12, Brown University, Department of Economics.
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  5. repec:ltr:wpaper:2002.03 is not listed on IDEAS
  6. Buly A Cardak, 2001. "Education Vouchers, Growth and Income Inequality," Working Papers 2001.06, School of Economics, La Trobe University.
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  8. Buly A Cardak, 2002. "Education Choice, Endogenous Growth and Income Distribution," Working Papers 2002.03, School of Economics, La Trobe University.
  9. Gerhard Glomm & B. Ravikumar, 1998. "Flat-Rate Taxes, Government Spending on Education, and Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(1), pages 306-325, January.
  10. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
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  16. Thomas J. Nechyba, 2000. "Mobility, Targeting, and Private-School Vouchers," American Economic Review, American Economic Association, vol. 90(1), pages 130-146, March.
  17. West, Edwin G, 1997. "Education Vouchers in Principle and Practice: A Survey," World Bank Research Observer, World Bank Group, vol. 12(1), pages 83-103, February.
  18. Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 818-34, August.
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  20. Cecilia Elena Rouse, 1998. "Private School Vouchers And Student Achievement: An Evaluation Of The Milwaukee Parental Choice Program," The Quarterly Journal of Economics, MIT Press, vol. 113(2), pages 553-602, May.
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Cited by:
  1. repec:ltr:wpaper:2004.03 is not listed on IDEAS
  2. Cardak, Buly A., 2005. "Education Vouchers, Growth, And Income Inequality," Macroeconomic Dynamics, Cambridge University Press, vol. 9(01), pages 98-121, February.
  3. C. Fan & Jie Zhang, 2013. "Differential fertility and intergenerational mobility under private versus public education," Journal of Population Economics, Springer, vol. 26(3), pages 907-941, July.
  4. Christian Ferreda & Matías Tapia, 2010. "Redistributive Taxation, Incentives, and the Intertemporal Evolution of Human Capital," Documentos de Trabajo 390, Instituto de Economia. Pontificia Universidad Católica de Chile..
  5. Nikos Benos, 2005. "Education Systems, Growth and Welfare," University of Cyprus Working Papers in Economics 5-2005, University of Cyprus Department of Economics.

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