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Should we raise public expenditure on basic education and reduce expenditure at college?

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Author Info
Marisa Hidalgo-Hidalgo () (Department of Economics, Universidad Pablo de Olavide)
Iñigo Iturbe-Ormaetxe () (Department of Economics, Universidad de Alicante)

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Abstract

This paper analyzes public intervention in education, taking into account the existence of two educational levels: basic education and college education. The government decides per capita expenditure at each level and the subsidy for college education. We explore the effect of transferring money from one level to the other on equity and efficiency. We find that there is always a policy reform that satisfies both the objectives of equity and efficiency, where efficiency refers to average productivity of college graduates. For developed countries, this policy consists of transferring resources from college education to basic education.

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File URL: http://www.upo.es/serv/bib/wps/econ0811.pdf
File Format: application/pdf
File Function: First version, 2008
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Publisher Info
Paper provided by Universidad Pablo de Olavide, Department of Economics in its series Working Papers with number 08.11.

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Length: 36 pages
Date of creation: Nov 2008
Date of revision:
Handle: RePEc:pab:wpaper:08.11

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Related research
Keywords: Basic education; college education; public expenditure in education.;

Other versions of this item:

Find related papers by JEL classification:
H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
I28 - Health, Education, and Welfare - - Education - - - Government Policy
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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References listed on IDEAS
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.:
  1. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute for the Study of Labor (IZA). [Downloadable!]
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  2. Guesnerie, Roger, 1977. "On the direction of tax reform," Journal of Public Economics, Elsevier, vol. 7(2), pages 179-202, April. [Downloadable!] (restricted)
    Other versions:
  3. William Blankenau & Steven Cassou & Beth Ingram, 2007. "Allocating Government Education Expenditures Across K-12 and College Education," Economic Theory, Springer, vol. 31(1), pages 85-112, April. [Downloadable!] (restricted)
  4. Driskill, Robert A & Horowitz, Andrew W, 2002. "Investment in Hierarchical Human Capital," Review of Development Economics, Blackwell Publishing, vol. 6(1), pages 48-58, February. [Downloadable!] (restricted)
  5. Lloyd-Ellis, Huw, 2000. "Public Education, Occupational Choice, and the Growth-Inequality Relationship," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 171-201, February.
  6. King, Mervyn A., 1983. "Welfare analysis of tax reforms using household data," Journal of Public Economics, Elsevier, vol. 21(2), pages 183-214, July. [Downloadable!] (restricted)
  7. Diego Restuccia & Carlos Urrutia, 2004. "Intergenerational Persistence of Earnings: The Role of Early and College Education," American Economic Review, American Economic Association, vol. 94(5), pages 1354-1378, December. [Downloadable!]
    Other versions:
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