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Parents’ Investments and Education Returns

Listed author(s):
  • Francesc Dilmé

    (Department of Economics, University of Pennsylvania, 160 McNeil Building, 3718 Locust Walk Philadelphia, Pennsylvania 19104-6297)

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    This paper analyses the relation between parents’ earnings and their children's education. In a context of perfect altruism, the model describes parents’ decisions on how much to consume and how much to invest in their children's education. The model predicts that returns on education in terms of wages should be linear. Using this model in a competitive economy, we show how the outcome depends on government subsidies or taxes on education. The usual tradeoff equality-efficiency arises in this context. Finally, the model provides some insights into the relation between education and productivity.

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    Article provided by ELSEVIER in its journal Cuadernos de Economía.

    Volume (Year): 32 (2009)
    Issue (Month): 89 (Mayo-Agosto)
    Pages: 039-058

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    Handle: RePEc:cud:journl:v:32:y:2009:i:89:p:039-058
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    Asociación Cuadernos de Economía Elsevier España, S.L. José Abascal, 45, planta 3ª 28003 Madrid

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