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Community, inequality, and local public goods: Evidence from School Financing in South Africa

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Author Info
Yamauchi, Futoshi
Nishiyama, Shinichi

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Abstract

"To examine how local income distribution affects both a community's ability to pay for schooling and the quality of that schooling, this research merges household and school census data from South Africa. Empirical results are twofold. First, while the median income and the average household income increase school fees, inequality inhousehold income (standard deviation) decreases school fees, which indicates that the lower tail of income distribution pulls down school fees. Second, an increase in school fees significantly improves school quality, decreasing the learner-educator ratio and increasing the number of nonsubsidized educators. The result is consistent with (1) strategic behavior of the low-income group and (2) optimal school fee determination with incomplete interhousehold income transfers. Empirical results and simulations demonstrate the possibility that income and asset inequality may reduce the quality of public goods, decreasing human capital and income growth for the next generation." Authors' Abstract

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Paper provided by International Food Policy Research Institute (IFPRI) in its series FCND discussion papers with number 201.

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Date of creation: 2005
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Handle: RePEc:fpr:fcnddp:201

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Related research
Keywords: South Africa ; local public goods ; school finance ; willingness to pay ; Human capital ;

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  4. Crouch, Luis A., 1996. "Public education equity and efficiency in South Africa: Lessons for other countries," Economics of Education Review, Elsevier, vol. 15(2), pages 125-137, April. [Downloadable!] (restricted)
  5. repec:fth:prinin:357 is not listed on IDEAS
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  8. Alesina, Alberto & Rodrik, Dani, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 465-90, May. [Downloadable!] (restricted)
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  9. David Card & Alan Krueger, 1996. "Labor Market Effects of School Quality: Theory and Evidence," Working Papers 736, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
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  10. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June. [Downloadable!] (restricted)
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  11. Eric A. Hanushek, 1998. "Conclusions and controversies about the effectiveness of school resources," Economic Policy Review, Federal Reserve Bank of New York, issue Mar, pages 11-27. [Downloadable!]
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  13. Alan B. Krueger, 1999. "Experimental Estimates Of Education Production Functions," The Quarterly Journal of Economics, MIT Press, vol. 114(2), pages 497-532, May. [Downloadable!] (restricted)
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  14. Perotti, Roberto, 1993. "Political Equilibrium, Income Distribution, and Growth," Review of Economic Studies, Blackwell Publishing, vol. 60(4), pages 755-76, October. [Downloadable!] (restricted)
  15. Pranab K. Bardhan & Dilip Mookherjee, 2000. "Capture and Governance at Local and National Levels," American Economic Review, American Economic Association, vol. 90(2), pages 135-139, May. [Downloadable!] (restricted)
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