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Income Distribution, Communities and the Quality of Public Education: A Policy Analysis

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  • Raquel Fernandez
  • Richard Rogerson

Abstract

This paper analyzes within the context of a multicommunity model the effects of several policies that affect the financing of public education. The key features of the model are: (I) individuals differ with respect to income, (ii) individuals choose in which community to reside, (iii) communities are characterized by a proportional tax on income and a quality of public education, and (iv) a community's tax rate is chosen by majority vote. We examine three types of policies: subsidies for residency of specific income groups in particular communities, ceilings or floors on community level educational spending, and income redistribution. In each case we examine the consequences of these policies for both welfare and the quality of education across communities. We identify several policies which make all individuals better off and increase the quality of education in all communities.

Suggested Citation

  • Raquel Fernandez & Richard Rogerson, 1992. "Income Distribution, Communities and the Quality of Public Education: A Policy Analysis," NBER Working Papers 4158, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:4158
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    Cited by:

    1. Lundberg, S.J. & Startz, R., 1996. "Inequality and Race: Models and Policy," Discussion Papers in Economics at the University of Washington 96-04, Department of Economics at the University of Washington.
    2. Benabou, R., 1992. "Heterogeneity, Stratification, and Growth," Working papers 93-4, Massachusetts Institute of Technology (MIT), Department of Economics.
    3. Gilbert, Guy & Picard, Pierre, 1996. "Incentives and optimal size of local jurisdictions," European Economic Review, Elsevier, vol. 40(1), pages 19-41, January.
    4. Boldrin, Michele, 2005. "Public education and capital accumulation," Research in Economics, Elsevier, vol. 59(2), pages 85-109, June.
    5. Blackburn, Keith & Bose, Niloy, 2003. "A model of trickle-down through learning," Journal of Economic Dynamics and Control, Elsevier, vol. 27(3), pages 445-466, January.
    6. Fernandez, Raquel & Rogerson, Richard, 1997. "Keeping People Out: Income Distribution, Zoning, and the Quality of Public Education," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(1), pages 23-42, February.
    7. Michael Kremer, 1997. "How Much does Sorting Increase Inequality?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(1), pages 115-139.
    8. Alejandro Gaviria & Momi Dahan, 1999. "Correlaciones entre hermanos y movilidad social en América Latina," Research Department Publications 4163, Inter-American Development Bank, Research Department.
    9. Alejandro Gaviria & Momi Dahan, 1999. "Sibling Correlations and Social Mobility in Latin America," Research Department Publications 4162, Inter-American Development Bank, Research Department.
    10. Gaviria, Alejandro, 2002. "Intergenerational mobility, sibling inequality and borrowing constraints," Economics of Education Review, Elsevier, vol. 21(4), pages 331-340, August.
    11. Raquel Fernandez & Richard Rogerson, 1993. "Zoning and the Political Economy of Local Redistribution," NBER Working Papers 4456, National Bureau of Economic Research, Inc.

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