Inequality, Growth and the Politics of Education and Redistribution
AbstractThis paper analyzes the political economy of public education and redistribution in an overlapping-generation model of a two-class society in which growth is driven by the accumulation of human capital. The levels of public education and lump- sum financial transfers are determined by voting, while private education which supplements public education is purchased individually. The model, which includes two-dimensional voting, demonstrates multiple steady-state political equilibria. One is an equilibrium with a high share of public education in government expenditure; the other is an equilibrium with a high share of lump-sum transfers. Numerical analysis shows empirically plausible result of growth, inequality and the composition of redistributive expenditures.
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Bibliographic InfoPaper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 12-09.
Length: 25 pages
Date of creation: May 2012
Date of revision:
Education; political economy; inequality; growth;
Find related papers by JEL classification:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-29 (All new papers)
- NEP-DGE-2012-05-29 (Dynamic General Equilibrium)
- NEP-FDG-2012-05-29 (Financial Development & Growth)
- NEP-PBE-2012-05-29 (Public Economics)
- NEP-POL-2012-05-29 (Positive Political Economics)
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