IDEAS home Printed from https://ideas.repec.org/a/cup/macdyn/v9y2005i01p98-121_04.html
   My bibliography  Save this article

Education Vouchers, Growth, And Income Inequality

Author

Listed:
  • CARDAK, BULY A.

Abstract

This paper uses a growth model with public and private education alternatives to investigate the implications of education voucher for economic growth and the evolution of income inequality. The results indicate that introducing education vouchers can increase economic growth. families that switch from public to private education due to vouchers experience higher incomes, leading to growth in the tax base which in turn raises public education expenditures and increases the growth of the whole economy. Vouchers have an ambiguous effect on income inequality. Gini coefficients indicate increasing inequality while other measures indicate decreased inequality. Comparing income distributions using generalised Lorenz curves, the distribution under a voucher scheme dominates the distribution without voucher. This implies that in the long run, vouchers offer a welfare improvement. In short run welfare comparisons however, more than half the population is worse off with vouchers, which is consistent with the repeated failures if voucher referenda in the US. The results add a new dimension on which vouchers can be evaluated in the continuing policy debate.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Cardak, Buly A., 2005. "Education Vouchers, Growth, And Income Inequality," Macroeconomic Dynamics, Cambridge University Press, vol. 9(01), pages 98-121, February.
  • Handle: RePEc:cup:macdyn:v:9:y:2005:i:01:p:98-121_04
    as

    Download full text from publisher

    File URL: http://journals.cambridge.org/abstract_S1365100505040095
    File Function: link to article abstract page
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Cardak, Buly A., 2005. "Education Vouchers, Growth, And Income Inequality," Macroeconomic Dynamics, Cambridge University Press, vol. 9(01), pages 98-121, February.
    2. Buly A. Cardak, 2004. "Education Choice, Endogenous Growth and Income Distribution," Economica, London School of Economics and Political Science, vol. 71, pages 57-81, February.
    3. Gerhard Glomm & B. Ravikumar, 1998. "Flat-Rate Taxes, Government Spending on Education, and Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(1), pages 306-325, January.
    4. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Oxford University Press, vol. 60(1), pages 35-52.
    5. Kaganovich, Michael & Zilcha, Itzhak, 1999. "Education, social security, and growth," Journal of Public Economics, Elsevier, vol. 71(2), pages 289-309, February.
    6. Bearse, Peter & Glomm, Gerhard & Ravikumar, B., 2000. "On the political economy of means-tested education vouchers," European Economic Review, Elsevier, vol. 44(4-6), pages 904-915, May.
    7. Cecilia Elena Rouse, 1998. "Private School Vouchers and Student Achievement: An Evaluation of the Milwaukee Parental Choice Program," The Quarterly Journal of Economics, Oxford University Press, vol. 113(2), pages 553-602.
    8. Galor, Oded, 1996. "Convergence? Inferences from Theoretical Models," Economic Journal, Royal Economic Society, vol. 106(437), pages 1056-1069, July.
    9. Lillard, Lee A, 1977. "Inequality: Earnings vs. Human Wealth," American Economic Review, American Economic Association, vol. 67(2), pages 42-53, March.
    10. Card, David & Krueger, Alan B, 1992. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 1-40, February.
    11. Eckstein, Zvi & Zilcha, Itzhak, 1994. "The effects of compulsory schooling on growth, income distribution and welfare," Journal of Public Economics, Elsevier, vol. 54(3), pages 339-359, July.
    12. Epple, Dennis & Romano, Richard E., 1996. "Ends against the middle: Determining public service provision when there are private alternatives," Journal of Public Economics, Elsevier, vol. 62(3), pages 297-325, November.
    13. Gradstein, Mark & Justman, Moshe, 1997. "Democratic Choice of an Education System: Implications for Growth and Income Distribution," Journal of Economic Growth, Springer, vol. 2(2), pages 169-183, July.
    14. Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 818-834, August.
    15. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    16. Cohen-Zada, Danny & Justman, Moshe, 2003. "The political economy of school choice: linking theory and evidence," Journal of Urban Economics, Elsevier, vol. 54(2), pages 277-308, September.
    17. West, Edwin G, 1997. "Education Vouchers in Principle and Practice: A Survey," World Bank Research Observer, World Bank Group, vol. 12(1), pages 83-103, February.
    18. Hoyt, William H. & Lee, Kangoh, 1998. "Educational vouchers, welfare effects, and voting," Journal of Public Economics, Elsevier, vol. 69(2), pages 211-228, June.
    19. Gradstein, Mark & Justman, Moshe, 2000. "Human capital, social capital, and public schooling," European Economic Review, Elsevier, vol. 44(4-6), pages 879-890, May.
    20. Thomas J. Nechyba, 2000. "Mobility, Targeting, and Private-School Vouchers," American Economic Review, American Economic Association, vol. 90(1), pages 130-146, March.
    21. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cardak, Buly A., 2005. "Education Vouchers, Growth, And Income Inequality," Macroeconomic Dynamics, Cambridge University Press, vol. 9(01), pages 98-121, February.
    2. Nikos Benos, 2005. "Education Systems, Growth and Welfare," University of Cyprus Working Papers in Economics 5-2005, University of Cyprus Department of Economics.
    3. repec:beo:journl:v:62:y:2017:i:212:p:43-62 is not listed on IDEAS
    4. Christian Ferreda & Matías Tapia, 2010. "Redistributive Taxation, Incentives, and the Intertemporal Evolution of Human Capital," Documentos de Trabajo 390, Instituto de Economia. Pontificia Universidad Católica de Chile..
    5. C. Fan & Jie Zhang, 2013. "Differential fertility and intergenerational mobility under private versus public education," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(3), pages 907-941, July.

    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:macdyn:v:9:y:2005:i:01:p:98-121_04. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Keith Waters). General contact details of provider: http://journals.cambridge.org/jid_MDY .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.