A Model of Vertically Differenciated Education
AbstractWe analyse the allocation of students who differ in their ability to two school types when there are peer effects (students learn more the better their classmates) and expected income after school depends also on the average productivity of peers. We derive the allocation under free school choice and decentralized determination of the academic level; we show that, compared to the social optimum, the level is suboptimal and to many students attend the better school type. A social planner can improve on the allocation under free school choice by prescribing a higher academic level.
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Bibliographic InfoPaper provided by Toulouse - GREMAQ in its series Papers with number 97.469.
Length: 15 pages
Date of creation: 1997
Date of revision:
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EDUCATION ; EXTERNALITIES;
Other versions of this item:
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- I20 - Health, Education, and Welfare - - Education - - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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