Education Policies, Economic Growth and Wage Inequality
AbstractIt is assumed that education simultaneously affects growth and wage inequality. Human capital is taken as lumpy, and education policy has a direct bearing on growth, the number of high-skilled people, and wages. It is shown that the optimal policy for the unskilled is Rawlsian and implies high after-tax returns on capital and high growth, whereas the skilled prefer an anti-Rawlsian policy with less education, lower growth, and more wage inequality. In contrast, a strictly utilitarian government chooses more education and less inequality than the Rawlsian. Thus, the unskilled prefer a more efficient and more equitable outcome than the skilled, and a strictly utilitarian policy may be more egalitarian than a Rawlsian policy.
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Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.
Volume (Year): 59 (2002/2003)
Issue (Month): 4 (December)
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Web page: http://www.mohr.de/fa
Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany
Find related papers by JEL classification:
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
- I2 - Health, Education, and Welfare - - Education
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- D3 - Microeconomics - - Distribution
- D6 - Microeconomics - - Welfare Economics
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- Günther Rehme, 2008. "Roemer, J. E.: Democracy, Education, and Equality," Journal of Economics, Springer, vol. 93(1), pages 95-100, February.
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