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Should Educational Policies Be Regressive?

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  • Humberto Moreira
  • Daniel Gottlieb

Abstract

In this paper, we show that when the government is able to transfer wealth between generations, regressive policies are no longer optimal. The optimal educational policy can be decentralized through appropriate Pigouvian taxes and credit provision, is not regressive, and provides equality of opportunities in education (in the sense of irrelevance of parental income for the amount of education). Moreover, in the presence of default, the optimal policy can be implemented through income-contingent payments

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Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society 2004 North American Summer Meetings with number 258.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:nasm04:258

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Keywords: Education; Pigouvian taxes; Student loans; redistribution.;

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