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Optimal public education policy in a two sector model


  • Sano, Koichiro
  • Tomoda, Yasunobu


Proposing a simple two sector model with occupational choice, this paper analyzes the relationship between optimal public education policy and industrial structure. Workers are employed based on their skills and education policy influences the distribution of human capital. Thus, the industrial structure determines whether an elite education policy or an egalitarian education policy is desirable. In particular, this paper indicates how the productivities of each sector and market sizes affect optimal public education policy.

Suggested Citation

  • Sano, Koichiro & Tomoda, Yasunobu, 2010. "Optimal public education policy in a two sector model," Economic Modelling, Elsevier, vol. 27(5), pages 991-995, September.
  • Handle: RePEc:eee:ecmode:v:27:y:2010:i:5:p:991-995

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    References listed on IDEAS

    1. Ulph, David, 1977. "On the optimal distribution of income and educational expenditure," Journal of Public Economics, Elsevier, vol. 8(3), pages 341-356, December.
    2. Hanushek, Eric A. & Leung, Charles Ka Yui & Yilmaz, Kuzey, 2003. "Redistribution through education and other transfer mechanisms," Journal of Monetary Economics, Elsevier, vol. 50(8), pages 1719-1750, November.
    3. Helmuth Cremer & Pierre Pestieau, 2006. "Intergenerational Transfer of Human Capital and Optimal Education Policy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(4), pages 529-545, October.
    4. Yeaple, Stephen Ross, 2005. "A simple model of firm heterogeneity, international trade, and wages," Journal of International Economics, Elsevier, vol. 65(1), pages 1-20, January.
    5. Saint-Paul, Gilles, 2004. "Are intellectual property rights unfair?," Labour Economics, Elsevier, vol. 11(1), pages 129-144, February.
    6. Gianni de Fraja, 2002. "The Design of Optimal Education Policies," Review of Economic Studies, Oxford University Press, vol. 69(2), pages 437-466.
    7. Cunha, Flavio & Heckman, James J. & Lochner, Lance, 2006. "Interpreting the Evidence on Life Cycle Skill Formation," Handbook of the Economics of Education, Elsevier.
    8. Bruno, Michael, 1976. "Equality, complementarity and the incidence of public expenditures," Journal of Public Economics, Elsevier, vol. 6(4), pages 395-407, November.
    9. 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.
    10. 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.
    11. Darío Maldonado, 2008. "Education policies and optimal taxation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(2), pages 131-143, April.
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    Cited by:

    1. Wei-Bin Zhang, 2016. "Impact of Education Subsidies and Taxation on Wealth and Human Capital Accumulation," Eastern European Business and Economics Journal, Eastern European Business and Economics Studies Centre, vol. 2(3), pages 222-247.
    2. Wei-Bin Zhang, 2014. "Endogenous population with human and physical capital accumulation," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 61(3), pages 231-252, September.
    3. repec:hur:ijarbs:v:7:y:2017:i:11:p:643-666 is not listed on IDEAS
    4. Wei-Bin, ZHANG, 2015. "Economic Oscillations With Endogenous Population, Human Capital And Wealth," Annals of Spiru Haret University, Economic Series, Universitatea Spiru Haret, vol. 6(2), pages 9-26.


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