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A Model of Public Education and Income Inequality with a Subsistence Constraint

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  • Kevin Sylwester

    ()
    (Southern Illinois University)

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    Abstract

    This paper constructs a model in which incomes do not necessarily converge under a public education system. School attendance creates an opportunity cost of foregone income that poorer agents might need. These poorer agents, unlike high-income agents, allocate less time to schooling and so are less able to increase their human capital. However, some agents in a poverty trap might actually have higher income, at least temporarily, than do agents who do not fall into this trap. The model also shows why better public education systems can lead to more income inequality and why a gradual allocation of resources to public education may prove more beneficial than a sudden, large shift of resources.

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    Bibliographic Info

    Article provided by Southern Economic Association in its journal Southern Economic Journal.

    Volume (Year): 69 (2002)
    Issue (Month): 1 (July)
    Pages: 144-158

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    Handle: RePEc:sej:ancoec:v:69:1:y:2002:p:144-158

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    Web page: http://www.southerneconomic.org/
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    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Oded Galor & Joseph Zeira, 2013. "Income Distribution and Macroeconomics," Working Papers 2013-12, Brown University, Department of Economics.
    2. Fernandez, Raquel & Rogerson, Richard, 1995. "On the Political Economy of Education Subsidies," Review of Economic Studies, Wiley Blackwell, vol. 62(2), pages 249-62, April.
    3. Perotti, Roberto, 1993. "Political Equilibrium, Income Distribution, and Growth," Review of Economic Studies, Wiley Blackwell, vol. 60(4), pages 755-76, October.
    4. Sylwester, Kevin, 2002. "Can education expenditures reduce income inequality?," Economics of Education Review, Elsevier, vol. 21(1), pages 43-52, February.
    5. Jimenez, Emmanuel, 1986. "The Public Subsidization of Education and Health in Developing Countries: A Review of Equity and Efficiency," World Bank Research Observer, World Bank Group, vol. 1(1), pages 111-29, January.
    6. 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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    Cited by:
    1. Bernhard Eckwert & Itzhak Zilcha, 2003. "The Effect of Better Information on Income Inequality," CESifo Working Paper Series 969, CESifo Group Munich.
    2. Catalina GutiƩrrez & Ryuichi Tanaka, 2009. "Inequality and education decisions in developing countries," Journal of Economic Inequality, Springer, vol. 7(1), pages 55-81, March.
    3. Gustavo A. Marrero & Juan G. Rodriguez, 2012. "Macroeconomic determinants of inequality of opportunity and effort in the US: 1970-2009," Working Papers 249, ECINEQ, Society for the Study of Economic Inequality.

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