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Promoting education under distortionary taxation: equality of opportunity versus welfarism

Author

Listed:
  • Pertti Haaparanta

    (Aalto University)

  • Ravi Kanbur

    (Cornell University)

  • Tuuli Paukkeri

    (VATT Institute for Economic Research)

  • Jukka Pirttilä

    (University of Helsinki, VATT, and UNU-WIDER)

  • Matti Tuomala

    (Tampere University)

Abstract

A common claim in the policy discourse is that a government wishing to achieve equality of opportunity should use public provision of education for equalisation of opportunities rather than income taxation, which only equalizes incomes. We develop a framework in which the tax and education provision rules in the welfarist and non-welfarist/equality of opportunity cases can be transparently compared. We show that in addition to education policies, progressive taxation also plays a role in achieving equality of opportunity, and illustrate how its use may differ under the two objectives. We also show how the provision of public education depends on how private education choices respond, potentially differentially by higher- and lower-income families.

Suggested Citation

  • Pertti Haaparanta & Ravi Kanbur & Tuuli Paukkeri & Jukka Pirttilä & Matti Tuomala, 2022. "Promoting education under distortionary taxation: equality of opportunity versus welfarism," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(2), pages 281-297, June.
    • Handle: RePEc:spr:joecin:v:20:y:2022:i:2:d:10.1007_s10888-021-09492-9
    DOI: 10.1007/s10888-021-09492-9
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    Cited by:

    1. Ravi Kanbur & Matti Tuomala, 2024. "How Does Predistribution Affect Redistribution?," Working Papers 19, Finnish Centre of Excellence in Tax Systems Research.
    2. Pertti Haaparanta & Ravi Kanbur & Tuuli Paukkeri & Jukka Pirttilä & Matti Tuomala, 2022. "Promoting education under distortionary taxation: equality of opportunity versus welfarism," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(2), pages 281-297, June.
    3. Kanbur, Ravi, 2020. "Economic Inequality and Academic Freedom," Working Papers 309988, Cornell University, Department of Applied Economics and Management.
    4. Alessandro Balestrino & Lisa Grazzini & Annalisa Luporini, 2023. "School Fees and Vouchers when Quality of Education Matters," Working Papers - Economics wp2023_02.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.

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    More about this item

    Keywords

    Equality of opportunity; Income taxation; Inequality; Public good provision;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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