We investigate how mobility among communities in residence-based public education systems influence households’ choices among public and private schooling. With this objective, we construct a model in which households differ along a single dimension: income. Intermediate income households unsatisfied with their local public school can either move to a community with a better public school or, if the price of housing there is very high, not move and acquire private education. If they choose the latter, perfect income stratification across educational sectors no longer characterizes equilibrium. Moreover, the private schools these households choose have lower quality than some private counterparts.
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Find related papers by JEL classification: H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects I20 - Health, Education, and Welfare - - Education - - - General R13 - Urban, Rural, and Regional Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies R31 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - Housing Supply and Markets
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Dennis Epple & Richard Romano, 2008.
"Educational Vouchers And Cream Skimming,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1395-1435, November.
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