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Public education and capital accumulation

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  • Boldrin, Michele

Abstract

I study an overlapping generations model where physical and human capitals are inputs of production that can be accumulated by witholding resources from current consumption. Human capital is the output of a schooling system which can be financed either by private expenditures or by taxes on current income or by a combination of both. In a political equilibrium with majority voting, public school financing appears as an instrument to solve a "free rider problem". By improving the skills of next period's workers it increases the expected return on capital, something which cannot be achieved by means of private school only. Public schools turn out to be an instrument for intergenerational income redistribution and they may be preferred to private schools just for this motive.

(This abstract was borrowed from another version of this item.)

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Bibliographic Info

Article provided by Elsevier in its journal Research in Economics.

Volume (Year): 59 (2005)
Issue (Month): 2 (June)
Pages: 85-109

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Handle: RePEc:eee:reecon:v:59:y:2005:i:2:p:85-109

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Web page: http://www.elsevier.com/locate/inca/622941

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References

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  1. Michele Boldrin & Larry E. Jones, 2002. "Mortality, Fertility, and Saving in a Malthusian Economy," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(4), pages 775-814, October.
  2. Christophe Chamley, 1991. "Externalities and Dynamics in Models of "Learning or Doing"," Boston University - Institute for Economic Development 17, Boston University, Institute for Economic Development.
  3. Harris, Christopher J, 1985. "Existence and Characterization of Perfect Equilibrium in Games of Perfect Information," Econometrica, Econometric Society, vol. 53(3), pages 613-28, May.
  4. Perotti, Roberto, 1993. "Political Equilibrium, Income Distribution, and Growth," Review of Economic Studies, Wiley Blackwell, vol. 60(4), pages 755-76, October.
  5. Larry E. Jones & Rodolfo E. Manuelli, 1990. "Finite Lifetimes and Growth," NBER Working Papers 3469, National Bureau of Economic Research, Inc.
  6. Michele Boldrin, 1991. "Threshold Externalities and Economic Development: A Note," Discussion Papers 953, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  7. Saint-Paul, Gilles & Verdier, Thierry, 1992. "Education, Democracy and Growth," CEPR Discussion Papers 613, C.E.P.R. Discussion Papers.
  8. West, Edwin G., 1991. "Public schools and excess burdens," Economics of Education Review, Elsevier, vol. 10(2), pages 159-169, June.
  9. Stiglitz, J. E., 1974. "The demand for education in public and private school systems," Journal of Public Economics, Elsevier, vol. 3(4), pages 349-385, November.
  10. Azariadis, Costas & Drazen, Allan, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 501-26, May.
  11. Michele Boldrin & Ana Montes, 2005. "The Intergenerational State Education and Pensions," Review of Economic Studies, Oxford University Press, vol. 72(3), pages 651-664.
  12. Zvi Eckstein & Itzhak Zilcha, 1991. "The Effects of Compulsory Schooling on Growth, Income Distribution and Welfare," Boston University - Institute for Economic Development 20, Boston University, Institute for Economic Development.
  13. Krusell, P. & Rios-Rull, J.V., 1993. "Vested Interests in a Positive Theory of Stagnation and Growth," Papers 547, Stockholm - International Economic Studies.
  14. V.V. Chari & Patrick J. Kehoe, 1989. "Sustainable plans," Staff Report 122, Federal Reserve Bank of Minneapolis.
  15. Michele Boldrin & Aldo Rustichini, 2000. "Political Equilibria with Social Security," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(1), pages 41-78, January.
  16. Boldrin, Michele, 1992. "Dynamic externalities, multiple equilibria, and growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 198-218, December.
  17. 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.
  18. Chari, V V & Kehoe, Patrick J, 1993. "Sustainable Plans and Mutual Default," Review of Economic Studies, Wiley Blackwell, vol. 60(1), pages 175-95, January.
  19. Lorenzo Forni, 2005. "Social Security as Markov Equilibrium in OLG Models," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 8(1), pages 178-194, January.
  20. Psacharopoulos, George, 1989. "Time trends of the returns to education: Cross-national evidence," Economics of Education Review, Elsevier, vol. 8(3), pages 225-231, June.
  21. Levin, Henry M., 1991. "The economics of educational choice," Economics of Education Review, Elsevier, vol. 10(2), pages 137-158, June.
  22. Peltzman, Sam, 1973. "The Effect of Government Subsidies-in-Kind on Private Expenditures: The Case of Higher Education," Journal of Political Economy, University of Chicago Press, vol. 81(1), pages 1-27, Jan.-Feb..
  23. Bernheim, B Douglas & Ray, Debraj, 1986. "On the Existence of Markov-Consistent Plans under Production Uncertainty," Review of Economic Studies, Wiley Blackwell, vol. 53(5), pages 877-82, October.
  24. George Psacharopoulos, 1985. "Returns to Education: A Further International Update and Implications," Journal of Human Resources, University of Wisconsin Press, vol. 20(4), pages 583-604.
  25. Aubhik Khan & Michele Boldrin & Larry E. Jones, 2005. "Three Equations Generating an Industrial Revolution," 2005 Meeting Papers 124, Society for Economic Dynamics.
  26. Leininger, Wolfgang, 1986. "The Existence of Perfect Equilibria in a Model of Growth with Altruism between Generations," Review of Economic Studies, Wiley Blackwell, vol. 53(3), pages 349-67, July.
  27. Caballe, Jordi & Santos, Manuel S, 1993. "On Endogenous Growth with Physical and Human Capital," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 1042-67, December.
  28. Fernandez, R. & Rogerson, R., 1992. "Income Distribution, Communities and the Quality of Public Education: A Policy Analysis," Papers 1, Boston University - Department of Economics.
  29. Ehrlich, Isaac & Lui, Francis T, 1991. "Intergenerational Trade, Longevity, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1029-59, October.
  30. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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