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A Foundation System and a State System - Private-School Implications on Welfare and Education Expenditure

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  • Kwiatkowski, Andrzej

Abstract

This paper examines the effects of two different education - financing systems: a foundation system and a state system on the level and distribution of resources devoted to education in the presence of private schools. We use political economy approach where households differ in their level of income, and the central tax rate used to nance education is determined by a majority vote. Our analysis focuses on implications of allowing for a private-school option. To evaluate the importance of private schools we develop a computational model and calibrate it using USA data. The results reveal that the private school option is very important quantitatively in terms of welfare, total resources spent on education and equity.

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File URL: http://repo.sire.ac.uk/handle/10943/213
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Paper provided by Scottish Institute for Research in Economics (SIRE) in its series SIRE Discussion Papers with number 2010-82.

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Date of creation: 2010
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Handle: RePEc:edn:sirdps:213

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Keywords: Education finance reform; Private schools;

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  1. Cohen-Zada, Danny & Justman, Moshe, 2003. "The political economy of school choice: linking theory and evidence," Journal of Urban Economics, Elsevier, vol. 54(2), pages 277-308, September.
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