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Parents Investments and Education Returns

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Author Info
Francesc Dilme (Universitat de Barcelona)
Abstract

This paper analyses the relation between parents earnings and their childrens education. In a context of perfect altruism, the model describes parents decisions on how much to consume and how much to invest in their childrens education. The model predicts that returns on education in terms of wages should be linear. Using this model in a competitive economy, we show how the outcome depends on government subsidies or taxes on education. The usual tradeoff equality-efficiency arises in this context. Finally, the model provides some insights into the relation between education and productivity.

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File URL: http://www.ere.ub.es/dtreball/E08194.rdf/at_download/file
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Publisher Info
Paper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 194.

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Length: 25 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:bar:bedcje:2008194

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Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques. Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona. Spain.
Web page: http://www.ere.ub.es
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Find related papers by JEL classification:
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
I28 - Health, Education, and Welfare - - Education - - - Government Policy
I22 - Health, Education, and Welfare - - Education - - - Educational Finance
J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty

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References listed on IDEAS
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